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Looming Changes on the Horizon for the CFPB

A memo obtained by CNBC says that Rep. Jeb Hensarling, R-Texas is expected to propose legislation that would allow President Trump to dismiss the director of the CFPB for any reason. The CNBC report comes after calls to fire the current director of the CFPB, came from House Financial Services Committee Chairman in an interview video shared on Twitter.

The CFPB, which was founded to protect consumers from financial institution abuse, functions as an independent agency. This means that even though the director is a political appointee, there is little Trump can do to remove current director, Richard Cordray who’s term doesn’t end until 2018. According to the memo, the bill would convert the head of the watchdog agency into a political appointee who could be dismissed at any time.  It would also strip the agency’s authority to bring cases against financial institutions and eliminate a database of consumer complaints.

A previous bill introduced by Sens. Deb Fischer, R-Nebraska; John Barrasso, R-Wyoming; and Ron Johnson, R-Wisconsin, would replace the director of the CFPB with a five-member bipartisan committee. The bill, called the Consumer Financial Protection Board Act, would replace the CFPB director with a five-member board appointed by the president and approved by the senate. This bill comes at a dangerous time for the CFPB, which is currently appealing a D.C. Circuit court decision that deemed the agency’s structure unconstitutional.

Brian Brooks, Fannie Mae’s Executive Vice President, General Counsel, and Corporate Secretary, is rumored to be among the Trump Administration’s picks as head of the Consumer Financial Protection Bureau (CFPB).

If Brooks is nominated for the position, he would face a difficult road to confirmation because of his close ties to Steven Mnuchin, Trump’s nominee for Secretary of Treasury. Attacks from democrats and consumer groups have accused Mnuchin of discriminatory and aggressive foreclosure tactics when he oversaw the fair lending program at OneWest bank.

"Foreclosures happen in an economic crisis. But OneWest was different," said Sen. Elizabeth Warren (D-Mass.), who helped establish the CFPB. "It quickly gained a reputation as a foreclosure machine … OneWest was notorious for its belligerence and for its cruelty."

The appeal by the CFPB in court may prove moot if Republicans move fast enough to approve the long sought after changes first.

About Author: Rawan Shishakly

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