The CFPB continues to be a target of House Republicans, with the House passing a bill last week that would make structural and other changes to the CFPB.  H.R. 3193, which passed by a 232-182 vote, incorporates five CFPB reform bills approved  in November 2013 by the House Financial Services Committee.  The bill was supported by the American Bankers Association, which sent a memo to House members urging them to support the bill. 

At least for now, the bill’s passage seems to be no more than a political exercise—it can be expected to meet with defeat in the Democratic-controlled Senate and the White House issued a statement criticizing the bill and stating that “the President’s senior advisors would recommend that the President veto [the bill].” 

H.R. 3193 would make the following changes to the CFPB: 

  • A “Financial Product Safety Commission” would be established to replace the CFPB 
  • The Commission would be comprised of five members, consisting of the Vice Chairman for Supervision of the Federal Reserve System and four additional members appointed by the President and subject to Senate confirmation, with one Commission member to be appointed Chair by the President
  • The Commission would be subject to the congressional appropriations process and an appropriation of $300 million per year would be authorized for FYs 2014 and 2015 (substantially less than the CFPB’s budget of more than $500 million for those two years)
  • For each new regulation it proposes, the Commission would be required to analyze the proposal’s financial impact on covered person regardless of size and whether the proposal would impair the ability of individuals and small businesses to access credit
  • The Financial Stability Oversight Council could stay or set aside a Commission regulation with a majority rather than a two-thirds vote
  • Salaries for Commission employees would be set in accordance with the General Schedule classification and pay system (Currently, the CFPB can base salaries on the Federal Reserve Board’s higher salary schedules)
  • The Commission would have to notify and obtain permission from a consumer before collecting nonpublic personal information about the consumer and such requirements would expressly also apply to contractors collecting information on the Commission’s behalf