The Consumer Bankers Association has sent a letter to the leadership of the House of Representatives urging the House to enact legislation that replaces the CFPB’s single director leadership structure with a five-person, bipartisan commission.

The CBA advocates for such legislation as a way to avoid the adverse consequences that it believes would result if the Supreme Court were to rule in Seila Law that the CFPB’s current structure is unconstitutional and the appropriate remedy is to sever the Dodd-Frank Act’s provision that only allows the President to remove the CFPB Director “for cause.”  The CBA expresses the view that a ruling that “install[s] a removable at-will director would leave financial institutions with few assurances that the rules they are complying with today would remain in place.”

In the letter, the CBA notes that legislation to establish a commission has passed the House Financial Services Committee six times and has passed the House four times.  It asserts that replacing the sole director model with a bipartisan commission “would depoliticize the CFPB while increasing stability, accountability and transparency for all consumers and industry stakeholders.”  CBA observes that “as we saw after the departure of Director Cordray, the CFPB’s current governance structure is subject to dramatic political shifts and strains with each change in presidential administration.  Unpredictable political shifts make it difficult for the financial services industry to plan for the future, which ultimately stifles innovation, limits access to credit, and hurts consumers.”

We agree with the CBA’s views on this issue.