The Consumer Bankers Association (CBA) offered its support for the proposed changes to the Consumer Financial Protection Bureau (CFPB) laid out last week by Acting Director Mick Mulvaney in the bureau’s semi-annual report.
Mulvaney proposed four statutory changes to the bureau. One of his recommendations is to fund the CFPB through Congressional appropriations, while another is to require legislative approval of major rules. The third recommendation is to ensure that the CFPB director answers to the president, while the fourth is to create an independent inspector general for the CFPB.
“CBA supports Acting Director Mick Mulvaney’s goal of bringing greater accountability to the agency,” CBA President and CEO Richard Hunt wrote to members of the House Financial Services Committee and Senate Banking Committee. “It is crucial that appropriate checks and balances are in place given the scope and importance of this agency. It is also important to insulate the Bureau from future political shifts that could reduce its ability to act impartially to ensure a fair and competitive marketplace.”
Mulvaney is set to provide testimony before these committees on the changes this week.
“The retail banking industry is best able to serve its customers when there is a stable and even-handed regulatory framework that produces clear and reasonable rules of the road,” Hunt wrote. “We encourage the CFPB to include industry and other relevant stakeholder input into their supervision, enforcement and rulemaking decisions making to prevent unintended effects on financial consumers.”
Hunt also advocated for a bipartisan, Senate-confirmed commission to lead the CFPB as opposed to a single director.
“CBA strongly supports the Financial Product Safety Commission Act of 2018 (H.R. 5266) to transition the leadership structure at the CFPB from a sole director to a bipartisan, five-member commission. A bipartisan commission at the CFPB would help provide certainty, establish clear and consistent rules of the road, and best protect consumers for generations to come,” Hunt wrote.
In addition, CBA doesn’t support the CFPB’s Consumer Complaint Database.
“The CFPB has gone far beyond its statutory authority of establishing the [Consumer Complaint] Database, by publishing the data, adding unverified narratives, and now proposing a subjective consumer survey on resolution satisfaction that has no proven benefit,” Hunt wrote. “The CFPB has never taken any steps to determine if consumers use these published reports or benefit from them in any way. Instead, these reports seem intended to tarnish banks and other financial institutions’ reputation, without verification and regardless of actual legal wrongdoing. Such action puts into question the objectivity of the data and thus its usefulness to consumers and regulators.”
Further, the CBA would like to see the CFPB’s rescind the payday lending or small-dollar bank loans rule and it supports a “know-before-you-owe” initiative – similar to the CFPB’s work on mortgage disclosures – for federal student loans.