In classic “Hill” style, 44 Republican Senators issued their writ to President Obama, stating that changes to the director position of the Consumer Financial Protection Bureau (CFPB) need to be made before they will confirm any nominee for the position. At the heart of the Republicans’ position is the establishment of a board, rather than the appointment of an individual, to preside over the CFPB. In what may be the most powerful regulatory body to have been established in the past century, Congress is looking to make sure that power is not centered in the hands of a single individual.
The CFPB was established under the new Dodd-Frank Act to regulate any person or business that provides “a financial product or service”. This bureau would then have ultimate regulatory, supervisory, investigative and enforcement powers over the entire financial products industry, including the decimated mortgage industry. And the director of this bureau would have ultimate power over pretty much the entire financial landscape, including Wall Street.
Adding to the requirement that the CFPB be ruled by a board of directors and not a single individual, Republicans are also pushing for the bureau to be subject to the appropriations process. Rather than submitting financial reports twice a year to justify its prior year’s budget, the Senators want to see the CFPB be subject to the same purse string issues as the SEC. Regrettably, we have seen how that has played out in the past.
So, Senate Republicans are looking to do a little horse trading for board positions. Add to this the requirement that the CFPB be kept on a tight leash for money. It looks like opening day for the CFPB may be delayed from its July 21 start date. Let’s hope it is not a complete failure to launch . . . or worse.
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