by Jeff Sovern
Here we go again.
The Republicans have repeatedly tried to convert the Consumer Financial Protection Bureau to a commission structure. The latest effort, H.R. 1266, is sponsored by Representative Randy Neugebauer of Texas. The bill would replace the CFPB's director with a five-member commission, of whom no more than three could be members of the same party. The commissioners would serve staggered terms.
Representative Neugebauer justifies his bill in these words:
Over the last several years, the Bureau’s actions and record have proven it can’t function in a sustainable manner. Perhaps, more than any other Washington agency, the CFPB has demonstrated a lack of transparency and a lack of accountability. It has proven it is susceptible to political influence – bringing into question its independence.
“This is all the more troubling because the Bureau has an important mission: to protect consumers. I support consumer protection but we must ensure product choice, credit availability and cost of credit are considered before rushing to regulate. To better serve the American people, the Bureau must adopt a more balanced and consultative process to its rulemaking.
Where to begin? First of all, it would have been nice if the representative had explained why he believes the Bureau is not functioning in a sustainable manner. The Bureau has returned huge sums to consumers and has adopted numerous rules that protect consumers. Why isn't that sustainable?
Second, what evidence supports the claim that the Bureau is not transparent and accountable? To mention only one thing, the Bureau holds frequent field hearings–one less than two weeks ago and another scheduled for this week–to keep the country very much informed about its activities. Director Cordray frequently testifies before Congress about the Bureau's functioning. And what does the Representative mean by political influence? By the way, according to the Center for Responsive Politics, Representative Neugebauer's biggest contributor is the Bank of New York. Banks and a banking organization make up three of his five biggest contributors. Is that what he means by accountability?
Third, how does a commission structure improve accountability? Why would five people running the show instead of one make the Bureau more accountable? It seems to me that it would actually make the Commission less accountable. Right now, the buck stops with Director Cordray. He can't duck responsibility. But if the Bureau had five commissioners, wouldn't each one be able to shift responsibility to the other commissioners? A commission would diffuse responsibility, rather than enhancing accountability. I can see why banks might want a commission structure. Commissions act more slowly. When they lack their full number of commissioners, they may be paralyzed by tie votes, as has happened with some commissions recently. That is good for those who oppose consumer protection. Not, of course, that Representative Neugebauer opposes consumer protection. Oh no. After all, he said he supports it. That must be why the banks are among his leading contributors.