Although lawmakers were ostensibly supposed to debate ways to overhaul the structure and authority of the Consumer Financial Protection Bureau, a hearing Wednesday in a House Financial Services subcommittee was sidetracked by questions over whether the agency should exist at all.
Republicans have introduced four bills that would, among other things, replace the CFPB director with a five-member board, give other regulators more power to overrule the consumer bureau, and delay implementation of its powers until a Senate-confirmed leader is in place.
But lawmakers spent less time discussing those issues, instead focusing on the political and ideological gulf between the two political parties over the bureau's existence.
"I take issue with the title of today's hearing, 'Legislative Proposals to Improve the Consumer Financial Protection Bureau,' because I disagree that these proposals are to improve," said Rep. Carolyn Maloney of New York, the top Democrat on the financial institutions subcommittee. "These proposals we are considering today come from some of the members who last year voted against the Dodd-Frank Financial Protection and Consumer Protection Act, which created the CFPB. Taken together, these proposals will only serve to delay, disrupt the CFPB from being able to fully do its job before it's even opened for business on July 21st."
Adam Levitin, a Georgetown University Law Center professor who testified at the hearing, agreed.
"Let's not escape what this hearing is really about," Levitin said. "The issue presented at this hearing is whether Congress cares more about increasing the profits of the banks or protecting the financial security of American families. … If you want to understand what this hearing is about, look at who is here at this witness table. There are three bankers and me."
But House Financial Services Committee Chairman Spencer Bachus said it wasn't about trying to undercut the new agency.
"Nothing could be further from the truth," he said. "In fact, my bill is for a commission, which is what this House passed. This is what we passed in Dodd-Frank. It was changed in conference to allow one person to run the agency with total discretion. And what we're advancing is not politics, it's the way government has always functioned, and that's not one person with unbridled authority."
Despite his intentions, however, most of the hearing was about whether the CFPB is burdensome and will cut off credit.
Rep. Patrick McHenry, R-N.C., echoed the Republicans' argument, saying that the CFPB is creating too much government.
"Last November, the voters sent a clear message to Washington," he said. "Massive new regulations are creating uncertainty and crippling job creation. With that in mind, I believe the legislation before us today goes — is extremely necessary in order to protect consumers while also making certain that small businesses and individuals aren't limited from accessing the credit that they need."
