WASHINGTON–Trade groups representing credit unions and banks have sent a letter to the Senate calling for the implementation of a five-person bipartisan commission at the Consumer Financial Protection Bureau (CFPB).
The letter, from NAFCU, CUNA, the Consumer Bankers Association (CBA) and the Independent Community Bankers of America (ICBA, was addressed to U.S. Senate Majority Leader Mitch McConnell (R-KY) and newly elected Senate Minority Leader Chuck Schumer (D-NY).
The four trade groups argue in the letter that not having a commission could put into question the Bureau’s future. An appeals court recently ruled that the structure of the CFPB is unconstitutional due to its leadership by a single person who is not accountable to Congress or the administration.
“The CFPB is an independent regulatory agency that provides the sole director unprecedented authority over financial institutions, with minimal oversight,” the letter states. “As the sole decision maker, the director can promulgate regulations and levy enforcement actions that have sweeping and long- lasting effects on credit availability for consumers. The current single director structure leads to regulatory uncertainty for consumers, industry, and the economy. In contrast, a Senate confirmed, bipartisan board or commission will provide a balanced and deliberative approach to supervision, regulation, and enforcement over financial institutions that is more in keeping with other financial regulators.”
Noting the CFPB has finalized or is in the process of finalizing several rules, including arbitration, small dollar, third-party debt collection, and prepaid cards, the letter states that Congress may utilize its authority under the Congressional Review Act (CRA) to repeal these actions.
“In the meantime, financial institutions must expend precious time and resources in complying with rules that may or may not materialize,” the letter states. “The 115th Session of 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.”
What Trade Group Leaders Are Saying
With the release of the letter each of the four trade groups also released a statement, including:
- CBA President & CEO Richard Hunt: “As we approach the beginning of a new administration, it is crucial we finally put in place a governing structure at the CFPB to ensure it does not become a political weapon, something we are certain Senate leaders McConnell and Schumer can appreciate. In addition, the governing structure of the agency makes the potential for abuse of power and political influence not only possible, but inevitable.”
- CUNA President Jim Nussle: “The CFPB as currently structured is not working for credit unions and their member-owners. Changing the structure of the agency and creating a multi-person commission will help bring much needed balance to the decision-making process. The agency was created to protect consumers and the American people deserve an agency that works on behalf of their best interests.”
- ICBA President & CEO Cam Fine: “A five-member commission would allow for more diverse views and expertise on issues before the agency, ensuring more balanced regulatory oversight and consumer protection. We are hopeful members of the next Congress view putting a commission at the head of such a critical agency as the first step in showing they are putting the interests of American consumers and businesses ahead of politics.”
- NAFCU President Dan Berger: “It is critical for Congress to establish a 5-person commission to head the CFPB. This commission would provide invaluable stability and clarity for credit unions, their members as well as other financial institutions and consumers. This commission would ensure that CFPB’s leadership structure would not be vulnerable to being changed every four years at the will of the President.”