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Banking and Housing Lobby Petitions for CFPB Structural Changes

The banking and housing lobby has recently sent a letter to the leaders of the Senate and House appropriations committees expressing their position that the Consumer Financial Protection Bureau should be restructured from a single director to a bipartisan panel of five people. 

A total of 22 organizations signed on, including the American Bankers Association, the National Association of Federally-Insured Credit Unions, and the National Association of Realtors, amongst others. In the collective letter, the authors make their case:

“A Senate confirmed, bipartisan commission will provide a balanced and deliberative approach to supervision, regulation, and enforcement for consumers and the financial institutions the CFPB oversees by encouraging input from all stakeholders. The current single director structure leads to regulatory uncertainty and instability for consumers, industry, and the economy, leaving vital consumer financial protection subject to dramatic political shifts with each changing presidential administration. Moreover, a commission is the traditional and customary structure for the regulators of our nation’s depository institutions.”

It is not immediately clear why the letter was sent to the appropriations committee.  However, Victor Whitman at imagines it has to do with the fact that these two committees control the budget process.

“Certain bills can be fast-tracked through budget resolutions employing special rules in what is known as reconciliation, and would not require 60 votes in the U.S. Senate to pass. This is how the Senate Republican leadership plans to pass its version of the Obamacare repeal bill and replacement, but legal experts have told Scotsman Guide News that changes to the CFPB couldn't be done this way.”

Currently, the director can only be removed by the president, “for cause,” however, many analysts don’t believe that Congress will be able to pass legislation before Richard Cordray’s appointment is up in 2018. 

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