Bank lobby chief calls for 'cooler heads' to revamp consumer bureau

News
September 12, 2017

The president of a top banking group on Tuesday criticized both parties for not installing a bipartisan commission to lead the Consumer Financial Protection Bureau, a Republican goal long opposed by Democrats fond of bureau's current director, Richard Cordray.

Richard Hunt, president and CEO of the Consumer Bankers Association, said both parties are to blame for failing to spread the CFPB’s power among a commission, akin to several other regulatory agencies.

"We need consumer protection, because if you don't have consumer protection, you don't have the banking trust." Hunt said. "It has nothing to do with Richard Cordray. It has to do with certainty and stability at the CFPB."

"Everybody's got blame," Hunt added. "It's time to get cooler heads from both political parties to look at the longevity of the CFPB."

The CFPB is currently lead by Cordray, a sole director whose term expires in July 2018. Hunt said a CFPB commission would create a more stable regulatory environment for banks that doesn’t depend on which party is in charge.

"We're playing in the banking industry for 20 years, not the next two years,” Hunt said during a small conference with reporters. "We shouldn't be in this position."

Republicans were largely unified in their attempts to create a CFPB commission, while Democrats opposed significant changes to the agency’s structure. House Financial Services Committee Chairman Jeb Hensarling (R-Texas) included a provision to do so in a massive 2016 bill to roll back the Dodd-Frank financial reform law but scrapped those changes in the 2017 version of the law that passed the House in June.

Hunt criticized Hensarling for getting rid of the commission proposal in favor of a measure to weaken the CFPB director’s power and give the president power to fire him.

"I wish he would have stuck to his guns past Nov. 8,” Hunt said, referencing the election of President Trump. “Chairman Hensarling was for a commission at the CFPB, voted for a commission at the CFPB, and got a new religion on Nov. 9. I don't know what happened there. Had he remained consistent, a CFPB commission would have been part of the second CHOICE Act and it would have passed."

A spokesman for Hensarling brushed off Hunt's remarks.

“No one is going to lose sleep over a Washington lobbyist getting upset that the House-passed Financial CHOICE Act is not the bill he would’ve preferred," said Hensarling spokesman Jeff Emerson. "We are focused, however, on enacting the best possible policy, and in light of the Financial CHOICE Act’s restructuring of the CFPB as a civil law enforcement agency, it makes sense to have a single director who is removable by the president and therefore accountable for enforcing the law.”

Hunt also blamed Democrats for opposing efforts to install a CFPB commission, insisting senators who privately support the measure are too afraid of the influence of Sen. Elizabeth Warren (D-Mass.) to back it in public. Warren, a progressive icon and potential 2020 presidential candidate, designed the CFPB as an adviser to then-President Barack Obama and opposes replacing Cordray with a commission.

Democrats have opposed the commission model even after Trump's election. While some said they’re open to working with Republicans to improve the CFPB, others dismissed the idea as an ill-intentioned backdoor into destroying the agency.

Hunt said the CBA is eager to help create a CFPB that protects consumers without overburdening businesses. Business groups, banks and Republicans have long complained that the CFPB abuses its power and overreaches with regulation, harming commerce and restraining economic growth.

Hunt's comments came as the CBA introduced its new chairman, Citizens Bank vice chairman of consumer banking Brad Conner. Conner said creating a CFPB commission was one of the group’s top priorities for 2018.

Conner said CBA’s other 2018 goals include taking over more student lending from the federal government, advocating for executive nominees with “consumer-facing business experience” and boosting declining bank branch activity with innovative updates.