WASHINGTON–The chairman of the House Financial Services Committee plans to move forward with legislation that seeks to neuter the CFPB.
According to a leaked memo that was authored by Rep. Jeb Hensarling (R-TX), the plan is to water down leadership at the agency, replace its director, limit the Bureau’s enforcement authority, reduce its ability to make rules, and repeal the consumer complaint system.
CFPB Director Richard Cordray’s term runs through 2018.
The proposal falls in line with a broader effort to repeal the Dodd-Frank Act, which President Trump has also promised. Not surprisingly, Democrats in Congress have blasted the plan.
During his confirmation hearing, Treasury Secretary nominee Steven Mnuchin said he believes the CFPB should cease to be funded by the Federal Reserve and instead be funded by Congress.
The release of the Hensarling memo came on the same day he authored an op-ed in the Wall Street Journal in which he called for Congress to “terminate” CFPB funding using the budget reconciliation process. He further called for the immediate removal of Cordray as executive director.
“The CFPB is arguably the most powerful, least accountable agency in U.S. history. CFPB zealots have the power to determine the ‘fairness’ of virtually every financial transaction in America,” Hensarling wrote. “The agency defines its own powers and can launch investigations without cause, imposing virtually any fine or remedy, devoid of due process.”
Hensarling has reintroduced the Financial CHOICE Act, which has the backing of the credit union trade groups. As currently proposed it would provide some credit union regulatory relief and also repeal the Dodd-Frank Act’s Durbin amendment. The legislation also reportedly will recommend no changes to the three-person NCUA board, which NAFCU has said it supports. Some, including NASCUS, have been calling for expansion of the NCUA board to five people, including someone with state regulatory experience.
As CUToday.info reported here, a number of analysts are predicting it will take longer to dismantle Dodd Frank than many expect.