Leadership change in CFPB called for by bank associations

Bank associations called for a change in CFPB leadership from a sole director to a bipartisan commission

Four banking association heads wrote a letter to Senate leaders Wednesday, asking for a change in leadership in the Consumer Financial Protection Bureau. The letter called for the CFPB to be led by a five-person, bipartisan commission instead of a single director – currently Richard Cordray. The association heads said a commission would be more accountable than a sole director who wields "unprecedented authority over financial institutions, with minimal oversight,” according to Reuters.

“The current single-director structure leads to regulatory uncertainty for consumers, industry, and the economy,” said the letter, which was signed by presidents of the Consumer Bankers Association, Independent Community Bankers of America, Credit Union National Association, and the National Association of Federal Credit Unions. “In contrast, a Senate-confirmed, bipartisan board or commission will provide a balanced and deliberative approach to supervision, regulation, and enforcement over financial institutions that is more in keeping with other financial regulators.”

The call for change was backed up by the recent ruling of a D.C. appeals court that a sole director has too much power, although it was against disbanding the bureau. Instead, the court recommended a system in which the CFPB director could be removed by the president at will.

The plan to change the CFPB was included in the continuing resolution bill of the House of Republicans. However it was tabled by the Senate until Donald Trump is sworn in as president.

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