The GOP-led House of Representatives on Feb. 27 passed a bill to curtail the power of the Consumer Financial Protection Bureau (CFPB). The legislation passed by a 232-182 vote but is unlikely to advance in the Democratic-controlled Senate this year. The White House has issued a formal veto threat.
The bill would replace the CFPB’s single director with a five-member board, which would receive funding from Congress rather than from the Federal Reserve. The legislation puts CFPB employees on the federal pay scale, rather than the higher pay scale for employees of bank regulators. It also would make it easier for a council of federal regulators to overrule the CFPB’s decisions and would prevent it from collecting data on consumers without their consent.
Republican lawmakers, who opposed the CFPB’s creation during passage of the Dodd-Frank financial overhaul law, disagree with its mortgage-lending rules and efforts to analyze financial trends by collecting data from banks. While 10 Democrats supported the new bill, most others argue that the CFPB has recovered billions for consumers harmed by banks and credit the agency with pursing violations in deceptive marketing, debt collection, and illegal fees.