A bipartisan commission leading the Consumer Financial Protection Bureau (CFPB) would ensure its political independence, CUNA and other trade organizations wrote Friday. The organizations wrote in support of the Consumer Financial Protection Commission Act of 2020, introduced by Rep. Blaine Luetkemeyer (R-Mo.).
“In light of the recent oral arguments heard by the U.S. Supreme Court in Seila Law v. the Consumer Financial Protection Bureau, we believe your legislation is the appropriate and sensible remedy that will bring long term stability to the Bureau,” the letter reads. “In addition to safeguarding the CFPB from executive and political interference, a Senate confirmed, bipartisan commission will provide a balanced and deliberative approach to supervision, regulation, and enforcement by encouraging input from all stakeholders.”
Seila Law v. CFPB is a lawsuit challenging the constitutionality of the CFPB being led by a single director removable only by cause. CUNA filed an amicus brief calling on the U.S. Supreme Court to vacate a title of the Dodd-Frank Act, then delay implementation by a year in order to give Congress time to make the necessary legislative changes. This position was echoed by the Wall Street Journal editorial board.
In addition, the letter follows how the current director structure has led to uncertainty within the financial services industry following then-Director Richard Cordray’s resignation November 2017, his attempt to name his successor, followed by President Donald Trump naming his own acting director.
The matter was not resolved until July 2018 when Cordray’s appointed successor resigned. Current CFPB Director Kathy Kraninger was nominated as director in June 2018 and was confirmed by the Senate in December 2018, after more than a clear of confusion over CFPB leadership.
“The financial services marketplace thrives in a stable regulatory environment. When regulatory stability is eroded by changing political dynamics, the consumer suffers from financial institutions’ inability to rely upon a consistent regulatory environment,” it reads. “Members from both parties have long supported legislation to replace the single director model with a commission. In fact, bipartisan legislation establishing a CFPB commission has passed the House Financial Services Committee six times and passed the U.S. House of Representatives four times, with Democrats and Republicans voting in favor.”