In a letter sent to Majority Leader McConnell and Minority Leader-elect Schumer, the Consumer Bankers Association, the Credit Union National Association, the Independent Community Bankers of America, and the National Association of Federal Credit Unions urge Congress to pass legislation to create a five-member commission to run the CFPB.
In their letter, the trade groups note that the CFPB “has recently finalized, or is in the process of finalizing, several rules, including arbitration, small dollar, third-party debt collection, and prepaid cards.” They comment that “[s]hould the CFPB continue to promulgate these and other rules, Congress may utilize its authority under the Congressional Review Act (CRA) to repeal these actions.” They argue that “Congress can bring certainty to consumers by passing legislation that would establish a commission and make needed changes to the many rules and regulations the Bureau has or will consider.” (The CRA establishes a special set of procedures through which Congress can nullify final regulations issued by a federal agency by passing a joint resolution disapproving the rule. Most significantly, the CRA’s special procedures establish a process under which a joint resolution of disapproval cannot be filibustered in the Senate and can be passed with only a simple majority.)
The trade groups also argue that the presidential election and the D.C. Circuit’s decision in CFPB v. PHH Corporation “have clearly demonstrated a sole director leadership model is fragile, uncertain, and leads to instability at the Bureau.” In PHH, the D.C. Circuit ruled that the CFPB’s single-director-removable-only-for-cause structure is unconstitutional and, to remedy the constitutional defect, severed the removal-only-for-cause provision from the Dodd-Frank Act to allow the President to remove the CFPB Director at will at any time. According to the trade groups, “[t]his 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.” (The CFPB has filed a petition with the D.C. Circuit in PHH seeking a rehearing en banc.)
A change to a five-member commission to run the CFPB has been proposed in a number of Republican-sponsored bills introduced over the approximately five years the CFPB has been in existence. Such a change is included in “The Financial CHOICE Act of 2016,” the Dodd-Frank Act replacement bill that was approved this past September by the House Financial Services Committee and is expected to serve as the Republican “wish list” for changes to the CFPB under a Trump Administration.