GOP Seeks to Limit Power of Consumer Financial Protection Bureau

Monday, 19 May 2014 06:30 AM

By Elliot Jager

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House Republicans are introducing a series of measures intended to tighten parameters for the activities of the Consumer Financial Protection Bureau, The Hill reported.

The CFPB was the brainchild of Harvard law professor — now senator — Elizabeth Warren, the Massachusetts Democrat, and launched in 2011 as an arm of the Federal Reserve System. The idea was to create a consumer protection agency focused on the financial sector.

Republicans have never been at peace with the agency and have sought to limit its activities and block the appointments of its top officials. They say the CFPB has too much power, acts capriciously, and is not sufficiently supervised.

A spokesman for the Republican-controlled House Financial Services Committee described the agency as "arguably the single most powerful and least accountable" in Washington. The measures proposed by Republicans are "common sense steps to make the bureau more accountable and transparent to the people it is supposed to serve."

The proposed GOP measures would set rules for how the CFPB holds meetings, pursues research, assembles data, scrutinizes institutions, and crafts rules.

A bill by Rep. Shelley Moore Capito, R-W.Va., would have the agency turn over fines it collects to the Treasury Department after it reimburses consumers. The CFPB has collected over $3.5 billion from companies, most of which were handed over to wronged consumers, its director, Richard Cordray, reported this month.

Any leftover fine money is put into a fund for financial educational programming. Republicans fear the fund gives the agency an incentive to levy penalties, according to the Hill.

House Republicans also want to create a dedicated inspector general for the 1,300-employee agency rather than have oversight provided by the Federal Reserve's inspector general.

A bill by Rep. Sean Duffy, R-Wis., would require meetings of the agency's advisory committee to be open to visitors.

CFPB defenders say that these proposals are part of ongoing Republican efforts to enfeeble the agency whose creation they opposed. Ed Mierzwinski, consumer program director of U.S. PIRG, told The Hill the bills were "designed to tie the CFPB in knots." He added, "I don't see any one of them that's necessary in any way, shape, or form."

GOP House members have also taken testimony from CFPB managers over charges that the agency discriminates against non-white employees, National Review reported.

The Democratic-controlled Senate is not expected to take up any of the Republican proposals, according to the Hill.

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