CFPB chief welcomes GOP focus on restructuring of agency
WASHINGTON — Following a court decision that removes a layer of job security for the head of the Consumer Financial Protection Bureau, the agency's current director said she is open to Republican lawmakers' proposals to change the bureau's structure.
Kathy Kraninger’s comments Thursday came after the Supreme Court last month struck down a provision in the 2010 Dodd-Frank Act that prevented the president from firing the CFPB director without cause. The court decided the “for cause” removal provision was unconstitutional for an agency run by a single director, versus a board or commission.
The ruling has heightened calls from GOP lawmakers to establish a bipartisan board or commission to govern the agency.
“I welcome the [proposed] action on structure by Congress, generally speaking, and I do believe Congress would come to a good conclusion on that,” Kraninger said at a hearing before the House Financial Services Committee, although she did not endorse any specific changes.
“Certainly, if I see legislation that I think would be detrimental to the agency … I certainly will let you know my views,” Kraninger said.
The comments came in response to Rep. Bill Huizenga, R-Mich., who asked Kraninger whether she thinks a five-member bipartisan commission structure at the top of the CFPB would work.
“There’s a number of us that have been amazingly consistent in our belief that the structure of the CFPB needs to be a commission,” Huizenga said.
Republican members of the committee agreed that the Supreme Court decision was not enough to address structural issues with the agency.
“We now have a real opportunity to work together to bring necessary statutory reforms to the CFPB,” said Rep. Patrick McHenry of North Carolina, the House committee's top Republican. “Reforms that will benefit consumers and bring clear guidance to industry so that they may better serve their customers. I ask my colleagues across the aisle to join us in taking this opportunity to create a bipartisan commission consistent with the Supreme Court’s decision.”
In response to questioning from McHenry, Kraninger said any reforms to CFPB governance should be handled legislatively.
“With respect to additional changes on structure or otherwise, I leave those in the hands of Congress,” Kraninger said.
Kraninger also commented on a number of pending CFPB rulemakings, including one dealing with Property Assessed Clean Energy — or PACE — loans. The loans have been deemed risky by the Federal Housing Administration and have created problems for borrowers.
After Congress directed the CFPB to enact regulations that deal with the “unique nature” of PACE financing, including ability-to-repay requirements, the agency solicited feedback in March on PACE loans. In the request for information, the CFPB asked for feedback on current standards and practices in PACE financings, borrower delinquencies and defaults, and information consumers receive before signing a PACE financing agreement.
In response to Rep. Brad Sherman, D-Calif., Kraninger said the agency would collect more data on PACE loans starting in September.
“The data collection that we need to predicate that notice of proposed rulemaking will begin in early September,” Kraninger said. “We’ll have the data this year.”