House Defies Presidential Veto Threat, Votes To Water Down New Consumer Agency
WASHINGTON – The House last night passed a bill to ease the power of the Consumer Financial Protection Bureau – the day the new agency was opened – despite a White House promise to veto the legislation.
The bill, backed by the credit union lobby, would expand the governance of the new consumer bureau from a single director to a five-member board and give existing financial regulators – including NCUA – increased powers over the agency’s rulemaking.
The Republican-led House passed the bill, 241-173, on the one-year anniversary of the Dodd-Frank Act, the financial regulation law that created the consumer bureau as a cornerstone of Wall Street oversight. But the bill has little prospect of passing the Senate, which is controlled by the Democrats.
House Democrats fought the GOP’s efforts to water down the new agency. “Instead of supporting the CFPB on its first day, the House Republicans are pushing forward with a bill to weaken this important agency and to delay, de-fang and derail it,” said Rep. Carolyn Maloney, D-N.Y.
Republicans say the consumer agency, which does not receive its funding from Congress, lacks proper oversight in its current form and has the power to threaten the safety and soundness of the financial institutions it oversees.
The Republican bill would replace the bureau’s director position with a bipartisan five-person board, lower the threshold for banking regulators to veto rules and delay the transfer of full authority until after a director is confirmed.
Senate Republicans have vowed to block any nominee for the director position until changes are made to the leadership structure, funding and oversight. President Obama nominated Richard Cordray, former Ohio attorney general now serving as the bureau’s enforcement chief, for the director post on Monday. The nomination was quickly shot down by Senate Republicans, who insist the changes be made before they vote to confirm a director.
The push for changes is backed by industry lobby groups including CUNA, NAFCU, the U.S. Chamber of Commerce, the American Bankers Association and the Independent Community Bankers of America.