January 28, 2013

Hensarling calls for CFPB changes

House Financial Services Chairman Jeb Hensarling, R-Texas, called anew Friday for establishment of a bipartisan commission at the CFPB in light of a federal appeals court ruling calling some of the president's agency appointments unconstitutional.

Last year, the House passed NAFCU-supported legislation that would replace the CFPB director post with a five-member, bipartisan commission. NAFCU maintains regular contact with Cordray and other CFPB staff in its efforts to prevent undue growth in credit unions' regulatory burden.

In Friday's statement, Hensarling said the recent court ruling is an opportunity for Congress and the administration "to make common sense reforms to the CFPB so it is transparent and accountable to the American people." He continued, "At a bare minimum, the CFPB should be governed by a bipartisan commission – which is how other federal agencies charged with consumer or investor protection operate. And to ensure there is proper oversight of this massive bureaucracy, the CFPB should be subject to the same appropriations process as other agencies."

A federal appeals court last week said the president's 2012 appointments to the National Labor Relations Board were unconstitutional. While made during a Senate recess, they did not occur during the intersession recess, the court found. That suit doesn't affect the appointment of CFPB Director Richard Cordray, but that appointment is being similarly challenged in a separate suit.

Sen. Mike Johanns, R-Neb., a member of the Senate Banking Committee, has called on last year's NLRB appointees and Cordray to resign their posts in light of Friday's ruling.

Cordray, whose appointment expires this year, was re-nominated by the president last week to a five-year term. House Financial Services Ranking Member Maxine Waters, D-Calif., praised the action, pointing to Cordray's work to ensure consumers access to better information about loan products and to go after unscrupulous mortgage servicers.