Massive Support Brewing to Change CFPB’s Structure

For years, credit union trade organizations and other groups have objected to the single director structure of the CFPB. On Thursday, 28 organizations, including NAFCU and CUNA, wrote a letter to strongly support a bill that would eliminate the operational structure of the CFPB to instead be run by a five-person bipartisan commission.

The bill, H.R. 4773, the “Consumer Financial Protection Act,” is similar to other bills passed in previous Congresses, but all have failed.

In the joint letter, sent to Rep. Blaine Luetkemeyer (R-Mo.), who is the ranking member of the House Subcommittee on Consumer Protection and Financial Institutions, stated a Senate confirmed bipartisan commission to lead the CFPB would “provide a balanced and deliberative approach to supervision, regulation and enforcement by encouraging input from all stakeholders. The current single director structure leads to uncertainty as administrations transition.”

The letter continued, “This uncertainty is not only borne by financial institutions providing significant lending services, but it negatively impacts America’s consumers, small businesses and our local economies. Dramatic shifts in the CFPB’s philosophy and approach with each change in presidential administration make it difficult for lenders and small businesses to plan for the future.”

Former President Donald Trump appointed Kathy Kraninger to lead the CFPB and she resigned on Jan. 20 at the request of President Joe Biden. Biden has since named Dave Uejio as acting director and nominated Rohit Chopra to become the CFPB’s next director.

The CFPB has been a target of business criticism and legal challenges almost from its creation as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The bureau can issue rules, conduct investigations and administrative enforcement proceedings, and bring enforcement actions in federal court.

Last summer, the U.S. Supreme Court ruled that the single director structure of the CFPB, limiting the president’s power to remove the director “at will,” violates the Constitution’s separation of powers.

Chief Justice John Roberts Jr., writing for the 5-4 majority, said an agency run by a single director “lacks a foundation in historical practice and clashes with constitutional structure by concentrating power in a unilateral actor insulated from presidential control.”

Currently, members of the House and the Senate are in recess and there is no timetable set for discussion of H.R. 4773.