More Proposed CFPB Reforms Clear Subcommittee

A House Subcommittee has approved a bill on Wednesday aimed that contained proposals for major reforms to the Consumer Financial Protection Bureau (CFPB)’s leadership and budget.

The House Financial Services and General Government Appropriations Subcommittee approved by a voice vote its Fiscal Year 2017 Financial Services Bill, which proposes three major changes to the Bureau. The bill proposes to increase oversight for the CFPB by:

• Bringing the CFPB’s funding under the annual Congressional appropriations process rather than receiving funding directly from the Federal Reserve.
• Replacing the Bureau’s director with a five-member bipartisan commission.
• Requiring the CFPB to study the use of pre-dispute arbitration prior to issuing regulations. The Bureau recently issued a controversial proposal to ban the use of arbitration clauses in financial contracts between businesses and consumers, which would open the door for consumers to file class action lawsuits against businesses.

“The job of this bill is two-fold: to make wise investments with taxpayer dollars in the programs and agencies that we need to grow our economy and enforce our laws, and to tightly hold the reins on the over-spending and overreach within federal bureaucracies,” House Appropriations Committee Chairman Hal Rogers (R-Kentucky) said. “This bill makes great strides on all accounts—carefully investing taxpayer dollars in programs that promote opportunity, while keeping these agencies accountable to the American people.”

The bill approved by the General Government Appropriations Subcommittee is one of a series of bills lately aimed at reforming the CFPB or rolling back Dodd-Frank that are gaining traction. In mid-April, the House Financial Services Committee. One of them, the Taking Account of Bureaucrats’ Spending (TABS) Act, aimed at controlling the Bureau’s spending by establishing an annual budget; the other bill that passed in the House Financial Services Committee, would repeal Dodd-Frank’s bailout fund for large, complex financial institutions.