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Capito Hosts Subcommittee Hearing On Oversight Of CFPB

Congresswoman Shelley Moore Capito, R-W.Va, Chairman of the Subcommittee on Financial Institutions and Consumer Credit, delivered opening remarks at a hearing on proposals to improve oversight of the CFPB.  Many have raised concerns that the Bureau lacks necessary oversight and is not subject to the same type of rules as other regulators.  Without anyone to say otherwise, the Bureau may create rules and regulations that stifle credit and consumer choice. 

Please find the release announcing the hearing here.

Remarks as Prepared for delivery:

This hearing will come to order.

This morning’s hearing marks the third hearing the Financial Institutions and Consumer Credit Subcommittee has held on oversight of the Consumer Financial Protection Bureau.  

We have before us today two panels that will comment on legislation that members of this subcommittee have been working on for the last month to make structural reforms to the Consumer Financial Protection Bureau.  

The first measure is H.R. 1121, which changes the leadership of the CFPB from a single director to a five person commission.    This is a crucial change to the structure of the bureau and I would like to thank Chairman Bachus for taking the lead on this legislation, of which I am a cosponsor.     This is not unprecedented for a regulatory agency.   The Securities and Exchange Commission, the Commodities Futures Trading Commission, and the Federal Trade Commission are examples of regulatory agencies led by a commission.   Most notably, the Consumer Products Safety Commission, which regulates the safety of thousands of non-financial consumer products, is led by a five member Commission.  The powers of the bureau are simply too broad for a single director and the move to a commission puts in place an important check on power. 

I would like to commend Mr. Duffy for his leadership on the second bill we will consider today, H.R. 1315.   This legislation makes important improvements to the Financial Stability Oversight Council’s ability to overturn a CFPB regulation.   Current law creates a situation in which the FSOC only has the ability to overturn a CFPB regulation if “the regulation or provision would put the safety and soundness of the United States banking system or the stability of the financial system of the United States at risk.”  Current law also requires a 2/3 majority vote to overturn a CFPB regulation.

This simply sets the bar too high.   Consumer protection and safety and soundness go hand in hand.    Mr. Duffy is to be commended for his legislation which makes pragmatic improvements by lowering the threshold for a vote by changing it to “regulation which is the subject of the petition is inconsistent with the safe and sound operations of United States financial institutions.”  In addition to lowering this threshold, Mr. Duffy’s bill changes the FSOC vote from 2/3 majority to a simple majority and excludes the Director of the CFPB from voting on CFPB regulations.  

It is my intent for the two discussion drafts to serve as an opportunity to explore two other important issues within the structure of the CFPB.   The first delays the transfer of consumer protection functions until there is a confirmed director. The second prevents the CFPB from sending personnel to accompany prudential regulators on examinations.  These are two critical discussions about the current structure of the CFPB before the designated transfer date and I look forward to hearing from our witnesses. 

This is just the beginning of what will be an ongoing dialogue of how to better reform the CFPB.   The current structure simply puts too much power in the hands of one individual and does not allow for sufficient oversight of the regulations put forth by the bureau.  

There have been recent statements made about the bureau being created as “a voice for American families” and the willingness of the bureau to stick up for those families.   The members of this subcommittee are elected by the American people.   It is our responsibility to protect the freedoms and liberties of our constituents.   We also have a responsibility to ensure that regulations are in place to properly protect consumers.  Finally, we have a responsibility to ensure that their personal financial decisions are left up to them and not unduly influenced by unelected bureaucrats who seek to limit consumer choice.   

I would now like to recognize the Ranking Minority Member, the Gentlelady from New York, Mrs. Maloney for the purpose of making an opening statement.