CFPB Improvements

CFPB Commission Legislation

NAFCU continues to support legislation changing the CFPB’s governance structure so the Bureau is led by a five-member bipartisan commission rather than a single director. Representative Blaine Luetkemeyer (R-MO) and Senator Deb Fischer (R-NE) have introduced bills on this topic in previous sessions of Congress. Members would serve staggered five-year terms, and the president would have the authority to remove any member of the commission. A bipartisan commission at the CFPB would provide for more open debate, diversity of thought, and a stable leadership structure, particularly in light of the Supreme Court’s decision in Seila Law that the CFPB Director must be removable by the president at will.


In June 2009, the Obama Administration released its plan for reforming the financial regulatory system. The hallmark of the administration's proposal was the creation of a new government agency aimed at consumer financial protection with rulemaking power over financial institutions, including credit unions. In January 2012, President Obama, despite opposition from Senate Republicans, appointed former Ohio Attorney General Richard Cordray to be the first director of the CFPB.

Under former Director Cordray, the CFPB aggressively pursued rulemaking and enforcement actions, promulgating such landmark regulation as the HMDA rule and the Ability to Repay/Qualified Mortgage rule. Thanks to NAFCU’s efforts, rulemakings such as the Arbitration Rule were overturned by Congress. NAFCU continues to advocate for tailored regulations that account for the unique nature and economic benefits of credit unions.

The CFPB’s single director, removable only-for-cause structure has been challenged on several occasions. Most notably, in October 2016, the D.C. Circuit Court of Appeals held in PHH Corp. v. CFPB that the CFPB’s structure is unconstitutional. Although that decision was later reversed, several other lawsuits have popped up across the country, setting up a potential circuit split that could bring the issue all the way to the Supreme Court. In January 2019, the Supreme Court declined to hear a lawsuit challenging the CFPB’s single-director structure. However, in October 2019, the Supreme Court agreed to hear a case filed by Seila Law challenging the CFPB’s single-director structure. Director Kraninger had previously notified Congressional leaders that the CFPB will no longer defend its structure, and the CFPB indicated that it will not defend its position in Selia Law. NAFCU attended oral argument at the Supreme Court in March 2020 and on June 29, 2020, the Supreme Court ruled the structure of the Bureau that limits the firing of the single director only for “just cause” to be unconstitutional and left it to Congress to address this “defect in the CFPB’s structure.”