WASHINGTON — A House Financial Services subcommittee approved three bills Wednesday that would change the structure of the Consumer Financial Protection Bureau and limit its powers until a director is in place.
Democrats argued that the bills have less to do with improving the new agency, and more to do with Republican opposition to Elizabeth Warren, the chief advocate for the bureau's creation and its de facto head for the past eight months.
"The backers of these bills suggest that its real purpose is to put in place oversight of the new CFPB," said Rep. Carolyn Maloney, the subcommittee's top Democrat. "The idea that there is not already rigorous oversight under the Dodd-Frank bill is simply wrong. The real reason is to delay, distract and weaken the CFPB before it goes into effect."
Rep. Shelley Moore Capito, R-W.Va., the chairman of the Financial Institutions Subcommittee, acknowledged that critics have characterized the bills as an attack on the new bureau.
"I couldn't disagree more," she said. "These three bills are an effort to make sure Congress is doing its job, and that there is a watchdog for the watchdog."
The subcommittee voted 13-7 to approve a bill, introduced by Financial Services Committee Chairman Spencer Bachus, R-Ala., that would replace the CFPB director with a five-member board. Bachus said his bill would provide continuity by preventing one director from unilaterally changing rules implemented by a previous director.
"This is not about Elizabeth Warren," Bachus said. "This is no more about Elizabeth Warren than it is about George Washington."
He also noted that the measure uses the same language from the version of regulatory reform legislation originally passed by the House last year, which would have put a commission in charge upon the conversion date, when the bureau officially assumes its rulemaking and enforcement authorities. (The final bill was changed during negotiations with the Senate.)
"If it was the way to approach it at the time — and all the Democratic members said it was — why all of a sudden is it a terrible idea?" Bachus said.
Maloney insisted that the debate "is clearly about Elizabeth Warren, so let's make it about her." She offered an amendment to Bachus' bill that would require the head of the commission to be an individual who is credited with the creation of the bureau, advocated for the bureau and is currently helping to set up the bureau — in effect, Elizabeth Warren.
Maloney said Warren is the only person who should lead the CFPB when it officially assumes its authority on July 21.
"I hope the president will nominate her," Maloney said. "And with the number of bankers coming out in support of her, the degree of probability of that happening appears very good."
Capito said consumer protection was important to everyone on the committee, but the bureau should be about more than one individual.
"I don't want to sit up here and make an argument on the merits of Professor Warren and her ability to oversee consumer protection," she said. "I have no doubts that she is very sincere and a very accomplished individual. This is about our consumers. How are we going to protect our consumers and get continuity in our rules and our regulations?"
Rep. Brad Miller, D-N.C., offered an amendment that would similarly change the structure of the Office of the Comptroller of the Currency, replacing the director with a commission. Capito ruled the amendment was not germane.
The subcommittee also voted, 13-8, in favor of a bill from Capito that would delay implementation of the CFPB's powers until a Senate-confirmed leader is in place. It voted 13-9 to allow the Financial Stability Oversight Council to overrule the CFPB with a simple majority vote, rather than the two-thirds vote established under Dodd-Frank.
Maloney said Capito's bill would create an enormous incentive for Senate Republicans to hold up the confirmation process and prolong the status quo indefinitely.
Although the bills should have no trouble passing the full committee and the GOP-controlled House, it's unlikely they would gain much traction in the Senate.
In a statement released ahead of Wednesday's vote, Warren reiterated her criticism that the bills are simply an effort to undercut the agency.
"Many in Congress have made clear their intention to defund, delay and defang the consumer agency before it can help one family," Warren said. "These bills are about preventing the CFPB from operating effectively — a dangerous game to play in light of recent lessons in the marketplace and how quickly financial threats to consumers emerge."
A slew of consumer advocates released statements ahead of the vote condemning the bills.
"These industry-backed bills are designed to stop the agency from doing its only job: protecting consumers," Ed Mierzwinski, the consumer program director of the U.S. Public Interest Research Group, said in a press release. "Congress should reject these wrong-headed proposals."
Lisa Donner, the executive director of Americans for Financial Reform, said in a press release that the bills "would virtually guarantee that the CFPB would be a weak and timid agency without the will or ability to curb the kind of financial abuses that caused the nation's worst financial crisis since the Great Depression."
