Will Congress Try To Kill The Consumer Financial Protection Bureau?

(Brad Clinesmith)

Since its creation as part of the 2010 Dodd-Frank financial reforms, the Consumer Financial Protection Bureau has been a target of pro-bank, anti-regulation lawmakers who contend that the agency lacks legislative oversight and puts too much authority in the hands of a single director. With the recent political power shift in the Senate and another presidential election on the horizon, some advocates are concerned that the anti-CFPB movement may take hold on Capitol Hill.

This was the subject of a debate earlier today at the Consumer Federation of America’s annual Consumer Assembly in D.C.

“It’s hard to judge any congress on the first couple of months,” acknowledged Neera Tanden, President of Center for American Progress. “We have some anxieties… Obviously, the CFPB is a large target for Republicans who have railed against it. We are more worried than not.”

Representing the other side of the aisle was Steve Bartlett, a former member of congress who has also been President of the Financial Services Roundtable.

According to Bartlett, this current crop of legislators are “neither friend nor foe” to Consumers. In his view, a move to reduce protections for consumers is taking a back seat to the issues that dominate the headlines — Iran, immigration, Medicare, ISIS, infrastructure.

“I don’t detect a great appetite on either side for greater or reduced consumer protections,” he explained.

While he does foresee what he dubs a “modest” restructuring of the CFPB, he admitted that the Bureau is a “fact of life” that has earned “grudging respect” from House Republicans, even though not many will admit it.

“I think CFPB has proven that consumer protection can work and does work,” said Bartlett. “It’s not perfect, but CFPB has proven to be a beneficial tool.”

Tanden acknowledged that “any agency can be reformed,” but cautioned that the concern about even modest tweaks to the Bureau is that it could be the thin edge of the wedge to open the CFPB up to further alterations that would weaken protections.

One thing that Bartlett said he hopes Congress will sort out is CFPB’s role: “Is it an enforcement mechanism, beating up bad guys, or a regulatory agency?”

In response to a question about what could happen to the Bureau if the next U.S. President is Republican, Tanden said that she’d hope whomever is President — regardless of political party — would appoint a CFPB Director (or panel of five directors, if CFPB critics get their way) who cares about protecting consumers.

by Chris Morran via Consumerist