In parting swipe at the CFPB, Toomey proposes appropriations process for agency's funding

WASHINGTON — At a hearing with Consumer Financial Protection Bureau Director Rohit Chopra, Sen. Pat Toomey, R-Pa., proposed legislation that would put the bureau under the congressional appropriations process. 

The legislation, proposed alongside Sen. Bill Hagerty, R-Tenn., would also put the CFPB under the leadership of a bipartisan board, similar to the structure at the Federal Deposit Insurance Corp.  

Chopra, appearing in font of the Senate Banking Committee for his second day of congressional appearances following a blistering hearing with the House Financial Services Committee, told Toomey that he believes that independent agencies are more able to stay clear of political influence and that Toomey's proposed board structure would allow for less accountability than the single-director structure. 

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"Let's be honest about the reality here. We're going to raise a lot of concerns today," Toomey said. "And at the end of the hearing, you're going to leave and if you want to, you can choose to just ignore everything that is said here at this podium and there's nothing anyone here can do about it." 

The proposal comes amid a decision from the Fifth Circuit that presents an existential crisis for the bureau: ruling that the CFPB's funding structure violates the Constitution's structural separation of powers. 

"That's why I think it'd be a good idea to begin discussions now about legislation that would remedy this," Toomey said. 

With limited time before the end of this Congress, and Toomey's departure from the body at the end of the year, there's not enough time for a legislative solution the the CFPB's funding structure to come to fruition. But Toomey's ideas in the bill reflect a pervasive desire in the Republican party to crack down on the CFPB and on Chopra. 

The U.S. Chamber of Commerce, which has taken swipes at Chopra in the past, supported the legislation — a powerful ally for Republicans as they embark on a campaign of oversight on the bureau. 

Bill Hulse, Vice President of the Center for Capital Markets Competitiveness at the U.S. Chamber of Commerce, said the group supports Toomey's legislation. The Chamber, a powerful political ally for Republicans, joined several banking trade groups in a lawsuit earlier this year against Chopra's revised guidance for what constitutes "unfair, deceptive and abusive acts or practices" under fair-lending laws.

Republicans preview harsh oversight of CFPB's Chopra in next Congress

"The U.S. Chamber of Commerce commends Sen. Toomey for championing legislation that will ensure the CFPB adheres to the checks and balances as called for under the Constitution," Hulse said. "The business community is committed to working with Congress to build bipartisan consensus to improve transparency and accountability at the CFPB."

Republicans, although they will control the House Financial Services Committee, will not have a clear line to change the CFPB's funding structure. Sen. Sherrod Brown, D-Ohio, the chairman of the Senate Banking Committee, said that Democrats will continue defending the bureau and the way it was written into Dodd-Frank, and noted that the Federal Reserve, the Office of the Comptroller of the Currency and the FDIC aren't subject to congressional appropriations. 

"Republicans have proposed bill after bill to weaken the CFPB, to take away the effective single-director structure, to put the agency's funding in the limbo of congressional appropriations, or to simply undo the CFPB," Brown said. "But Congress created the CFPB and specifically designed its funding structure to make the agency an effective consumer watchdog."