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Removing Barriers Blog

CUNA Pushes for Bipartisan CFPB Commission, Outlines Problems with Single Director Structure
Posted December 07, 2016 by CUNA Advocacy

CUNA sent a letter to Senate Leadership this morning along with the Consumer Bankers of America (CBA), NAFCU, and ICBA urging that the current single director of the CFPB be replaced with a Senate-confirmed, bipartisan board consisting of five members. 

In the letter, addressed to Senate Majority Leader Mitch McConnell (R-KY) and Minority Leader Chuck Schumer (D-NY), the joint trades address concerns that the CFPB presently exercises “unprecedented authority over financial institutions, with minimal oversight,” leading to “regulatory uncertainty for consumers, industry, and the economy.” By contrast, a board structure would offer enhanced stability, and bring the CFPB more in line with other regulatory agencies. 

The letter outlines why leaving the leadership of the CFPB to a single director’s ideology creates uncertainty for consumers relying on financial institutions, which is exacerbated by the recent decision by the D.C. Circuit Court in PHH

The letter states: 

The 2016 presidential election and the recent D.C. Circuit Court Case, PHH Corp. v. CFPB have clearly demonstrated a sole director leadership model is fragile, uncertain, and leads to instability at the Bureau.  In PHH, the appellate court found the CFPB is “unconstitutionally structured” due to the fact the sole director can be removed only for cause by the president, stating this is a “gross departure from settled historical practice.”  Put simply, the D.C. Circuit Court held the president may remove the director at will.  This result makes it even more apparent what a whipsaw effect the single director model presents, inhibiting the ability for financial institutions to plan for the future, which in turn limits economic growth and hurts consumers. 

CUNA has long advocated for structural changes to the CFPB, including replacing the single director with a board, as well as altering the funding mechanism to bring the Bureau under the appropriations process. CUNA strongly supports H.R. 1261, the Bureau of Consumer Financial Protection Accountability Act of 2015, and H.R. 1266, the Financial Product Safety Commission Act of 2015, introduced by Representatives Sean Duffy (R-WI) and Randy Neugebauer (R-TX), respectively, which would achieve these twin goals. 

The letter ends by noting that, “Meeting the credit needs of American consumers and small businesses is the fundamental mission of our financial institutions.” CUNA has urged the CFPB to consider how overbroad regulations detrimentally impact the ability of credit union members to obtain safe and affordable credit.