House Financial Services Committee Chair Spencer Bachus (R-Ala) has introduced legislation that would replace the Director of the Bureau of Consumer Financial Protection with a bipartisan Commission of five members at the Bureau, modeled on the SEC and FTC. According to Chairman Bachus, the Responsible Consumer Financial Protection Regulations Act is needed because the Dodd-Frank Act currently puts too much power in the hands of one person. Under Dodd-Frank, the Director of the CFPB is given a broad and virtually unlimited mandate to substitute his or her judgment for that of consumers and the free market. In the Chair’s view, empanelling a five-member commission is an important first step in ending predatory financial practices without inappropriately limiting access to credit that small businesses and individuals want and need.
Under the legislation, a five-member Commission would carry out all of the duties that would otherwise fall to the Director of the CFPB. This proposed structure of the CFPB is the same structure that has worked well for many other federal regulators, including the FTC, FDIC and the SEC.
The legislation introduced by Chairman Bachus is identical to the bipartisan approach the House took to consumer protection during debate on financial regulatory reform in the 111th Congress. However, that approach was later dropped by conferees to the House-Senate conference on the Dodd-Frank Act.