WASHINGTON – Federal legislators from both parties and both houses of Congress told attendees of NAFCU's 2015 Congressional Caucus that they remain determined to replace CFPB Director Richard Cordray with an independent board of directors and make the CFPB an independent commission.
Rep. Randy Neugebauer (R-Texas) drew open laughter from the assembled industry executives when he recounted how he had brought Rep. Maxine Waters (D-Calif.), the highest-ranking Democrat on the House Financial Services Committee, around to the idea.
"I told the ranking member of our committee that I could change her mind on the independent CFPB board with just three words," Neugebauer said. "She said, 'What three words?' And I replied, 'CFPB Director Neugebauer.'"
Neugebauer used the story to illustrate one of the themes behind the lawmakers' argument: By making the CFPB an independent agency with more than one executive in charge, the agency would be insulated from the vagaries of presidential politics. As long as the CFPB remains under the leadership of one all-powerful director, Neugebauer argued, a new administration would have the power to change its direction sharply by simply appointing a new director.
An independent board of commissioners with staggered terms would give the CFPB a level of stability that it currently lacks, Neugebauer contended, as well as more transparency.
He also drew laughter when he said he agreed with both then-Rep. Barney Frank and Sen. Elizabeth Warren when they supported having a board govern the agency while drafting the Dodd-Frank Act, which authorized the agency.
"So yes, I agree with Barney Frank and Elizabeth Warren," Neugebauer crowed. "I support having a five-member board run the CFPB. Barney Frank didn't think a single director for the agency was a good idea. Elizabeth Warren didn't either in the beginning."
Neugebauer also told executives that he had homework for them to do: Contact their federal lawmakers, particularly those not on the financial services committee, and tell them to back the independent commission bill and other regulatory relief measures.
"Don't take it for granted that your legislators are going to know what to do on these bills," he said.
Neugebauer was not the only lawmaker to bring up the independent commission. Rep. Kyrsten Sinema (D-Ariz), also advocated for making the agency a commission, and said she believes the reasons for making the change far outweigh arguments for the status quo.
"When I have spoken with lawmakers and taken the political heat out of it, I have found a lot of bipartisan agreement," Sinema said in response to a question about the change.
Sinema agreed with Neugebauer in that having more than one person at the head of the agency would make it more stable over time, and might help the CFPB listen more closely to some of the stakeholders it oversees.
Neugebauer and Sinema said they anticipate the measure might move from the committee to the full House in late October, and that they were confident it would pass to the Senate.
When asked how the measure would fare there, Sinema said she would recommend focusing on the measure's policy impacts and removing the political heat from the question.
"No agency is perfect," Sinema said, adding that having a board with more than one director could actually help the agency survive potentially hostile future legislatures or administrations.
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