Senate Bill Proposes 5-Member Board Structure For CFPB

A bill introduced in the U.S. Senate introduced January 11, 2017 would amend the Consumer Financial Protection Act of 2010 by transitioning the CFPB to a 5-member Board of Directors rather than a single Director-led structure.

The bill (S. 105), titled “Consumer Financial Protection Board Act of 2017,” was introduced by Republican Senators Deb Fischer (Neb.), Ron Johnson (Wisc.), and John Barrasso (Wy.), and was referred to the Committee on Banking, Housing, and Urban Affairs.

Among the specifics in the bill are:

  • Staggered terms, with three of the initial five members serving 30 month terms; the other two (and subsequent members) serving 5-year terms
  • Removal by the President for “inefficiency, neglect of duty, or malfeasance in office”
  • No member may be reappointed to a second consecutive term, except in the case where that individual had been appointed for less than a full 5-year term
  • Not more than three members of the Board may be from any one political party

The full text of the bill can be downloaded here.

In parallel, last week President Trump signed an executive action which begins the process of reviewing the Dodd-Frank act. House Financial Services Committee Chairman Jeb Hensarling (Tex.) and Oversight and Investigations Subcommittee Chairman Ann Wagner (Wisc.), both Republicans, announced that the President’s action closely mirrors provisions found in the Financial CHOICE Act.

Wagner said:

“I applaud President Trump for signing this executive order to comprehensively review our financial system’s regulatory framework and identify rules and regulations that are impeding economic growth and opportunities for consumers, investors, and entrepreneurs. President Trump’s order is consistent with our vision in Congress to end the ‘Washington-knows-best’ mentality, as we move forward with the Financial CHOICE Act to kick-start our economy and provide hardworking Americans with clear opportunities for a successful future.” 

insideARM Perspective

Hold onto your hats.

By Stephanie Eidelman