Treasury recommends dramatically limiting CFPB authority

by Ryan Smith14 Jun 2017
A new report by the Treasury Department recommends substantial changes to the structure and authority of the Consumer Financial Protection Bureau.

The report, released Tuesday, was issued in response to an executive order issued by President Donald Trump in February directing the Treasury to examine financial regulations. It is the culmination of four months of work by the department, which met with banks, regulators and consumer advocates in order to compile the report.

The Treasury’s report said, in effect, that the CFPB in its current form does more harm than good.

“The CFPB was created to pursue an important mission, but its unaccountable structure and unduly broad regulatory powers have led to regulatory abuses and excesses,” the report said. “The CFPB’s approach to enforcement and rulemaking has hindered consumer choice and access to credit, limited innovation, and imposed undue compliance burdens, particularly on small institutions.”

One of the report’s harshest criticisms of the agency was its leadership structure.

“The CFPB is led by a single Director who wields unilateral authority to enforce 18 enumerated federal consumer financial laws affecting major consumer decisions — from buying a home to paying for college,” the report said. “Despite this power, the unelected Director does not answer to the President or Congress in any meaningful sense.”

The Treasury said that the structure of the CFPB “should be reformed to ensure that it is accountable to elected officials and, ultimately, to the American people.”

The report recommended that the leadership structure of the CFPB be changed to make the director removable at will by the president, or to replace the director with a multi-member board, “which would create an internal check on the exercise of agency power.”

According to a HousingWire report, the Treasury made other recommendations to limit the CFPB’s authority, including:
  • Seeing that regulated entities are given abundant notice of the CFPB’s interpretation of regulation before making them face enforcement actions
  • Procedural reforms to “curb excesses and abuses in investigations and enforcement actions
  • Eliminating the CFPB’s “duplicative and unnecessary” supervisory authority
  • Increasing safeguards for the agency’s Consumer Complaint Database

COMMENTS

  • by NOlan | 6/14/2017 11:11:59 AM

    LOL, no surprise here. "The report recommended that the leadership structure of the CFPB be changed to make the director removable at will by the president" THIS IS CODE for make the position nothing more than a political stooge with no regard for consumer protection. Drain the swamp? Not so much.

  • by sbharkness | 7/10/2017 6:12:46 PM

    Nolan,

    Why is it that every fiber in my being is screaming, "this person benefits from the most disastrous ill thought out piece of legislative garbage to ever it the mortgage industry"? I have signed my response with my name. We do not need the heavy handed jack booted thug gestapo tactics of Richard Corduroy. Re-instating something similar to the Glass-Steagall act that was killed by a Democratic President named, BILL CLINTON would suffice. As would putting the banks back on the hook if they again got too greedy. There was an earmark slipped into a MUST PASS SPENDING BILL TO KEEP THE GOVERNMENT OPEN on a Lazy November Congress when most were back at home for the holidays. This earmark, just several sentences long put WE THE PEOPLE of the UNITED STATES OF AMERICA back on the hook if the MEGA-BANKS, chiefly, Citibank, Chase, Goldman Sachs, and Bank of America bet wrong and lose big...more than their reserves will cover. The shareholders don't have to worry because the American taxpayer will get SCREWED AGAIN because of this earmark. The CFPB does NOTHING but harass the little mom and pop independant Mortgage Brokers that have faithfully served their prospective communities for years.

  • by sbharkness | 7/10/2017 6:13:12 PM

    Nolan,

    Why is it that every fiber in my being is screaming, "this person benefits from the most disastrous ill thought out piece of legislative garbage to ever it the mortgage industry"? I have signed my response with my name. We do not need the heavy handed jack booted thug gestapo tactics of Richard Corduroy. Re-instating something similar to the Glass-Steagall act that was killed by a Democratic President named, BILL CLINTON would suffice. As would putting the banks back on the hook if they again got too greedy. There was an earmark slipped into a MUST PASS SPENDING BILL TO KEEP THE GOVERNMENT OPEN on a Lazy November Congress when most were back at home for the holidays. This earmark, just several sentences long put WE THE PEOPLE of the UNITED STATES OF AMERICA back on the hook if the MEGA-BANKS, chiefly, Citibank, Chase, Goldman Sachs, and Bank of America bet wrong and lose big...more than their reserves will cover. The shareholders don't have to worry because the American taxpayer will get SCREWED AGAIN because of this earmark. The CFPB does NOTHING but harass the little mom and pop independant Mortgage Brokers that have faithfully served their prospective communities for years.

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