Consumer Financial Protection Safety and Soundness Improvement Act of 2011

Floor Speech

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Mrs. CAPITO. I yield myself 4 minutes.

Mr. Chairman, a year ago, the President signed into law the most sweeping financial regulatory reform package in nearly a generation. The centerpiece of the Dodd-Frank Act was the creation of the Consumer Financial Protection Bureau. While there was nearly unanimous agreement that improvements were needed in the regulatory structure for financial services and consumer credit, we as Republicans did not agree that the best answer to the problems was creating an entirely new bureaucracy.

No legislation is perfect, and Dodd-Frank is a law that needs to be improved and refined. The legislation before us today marks an important step in improving the structure of the Consumer Financial Protection Bureau.

I would like to thank both Chairman Bachus and Mr. Duffy for their leadership on this issue.

The creation of the CFPB presents the first time in which consumer protection and safety and soundness regulation will not be handled by the prudential financial regulators for institutions over $10 billion in assets. While we do not disagree that many of the prudential regulators failed to uphold their responsibilities in the years leading up to the financial crisis, there is a legitimate concern in separating consumer protection from safety and soundness.

This is why H.R. 1315 is a much needed improvement to the Dodd-Frank Act. The act gives the Financial Stability Oversight Council, also known as FSOC, the ability to override a CFPB rule or regulation. However, the threshold is set so high for the FSOC to consider the overturning of a CFPB rule or regulation that, in reality, it will never happen. Furthermore, a two-thirds majority of the FSOC is needed to overturn the rule or regulation once the petition is filed. This simply sets the bar too high and further exacerbates the problem presented by separating consumer protection from safety and soundness.

This is Mr. Duffy's bill, and it will lower the threshold for petitioning the FSOC to ``regulation which is the subject of the petition that is inconsistent with the safe and sound operations of United States financial institutions,'' and will require a simple majority of the FSOC to overturn a CFPB rule or regulation. This is a critical improvement to the CFPB that will ensure that CFPB regulations strike the balance between consumer protection and safety and soundness.

The Rules Committee Print also includes two bills that the Financial Services Committee has reported favorably. The first represents an important change to the leadership structure of the CFPB that will provide greater stability in leadership and moderation in rulemaking. As we have seen over the last 9 months, the current leadership structure provided for the CFPB is subject to toxic political fights. Individuals and groups from across the political spectrum have advocated for whom they believe to be the ideal candidate and, in some cases, the only acceptable candidate. This is not good for consumers, and it is not good for the legitimacy of the agency.

Rather than a single director, we are advocating for a five-person commission. This strengthens the leadership of the CFPB in two ways. First, a commission provides greater stability in leadership. We are all aware of the challenges in the Senate's ability to approve nominees. A commission where the individual commissioners are staggered in their terms will provide greater stability by ensuring there is always some form of leadership at the CFPB. A commission will also provide greater consistency, not only in rulemaking, but also in administration. I fear that a single director will set up a situation in which the leadership of the CFPB will be subject to the variances in ideology from one administration to another when the director is appointed. Consumers stand to lose the most if we have a situation in which the directorship of the CFPB swings back and forth between the extremes of the political spectrum.

Finally, H.R. 1315 includes legislation that I introduced to prevent the transfer of full powers to the CFPB, which should begin today, until there is a Senate-confirmed director or chairman in place.

Personally, I think this is really good government. We are talking about an agency that is sailing into unchartered waters without a captain of the ship. It is irresponsible to proceed without a leader confirmed by the Senate. In conclusion, I know that the creation of the CFPB is a source of great passion, and I look forward to discussing these bills. I reserve the balance of my time.

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Mrs. CAPITO. I yield myself such time as I may consume.

Mr. Chairman, I really am just amazed at the hyperbole of the dismantling and the ruining of the agency and the weakening of the agency. The Bureau will go forward with all of the consumer protections that it's empowered with in the Dodd-Frank bill. The original intent was a commission. We go back to a commission.

Let me just tell you, the President has had an entire year to nominate this very important person to lead this Bureau, and it wasn't until the beginning of this week, Monday, did he finally get around to it. What kind of signal does that send? At least to me, it sends a signal that it really isn't all that important to have that person there Senate-confirmed, as the minority leader said, with the oversight of the United States Senate.

And let's talk about the Financial Services Oversight Commission. There are 10 people on there. I am going to go through them quickly because I don't want to use too much time.

Secretary of the Treasury, he's confirmed; Chairman of the Federal Reserve, Bernanke, he's confirmed; Director of the CFPB, somebody was nominated 4 days ago, empty; Chairman of the FDIC, Acting Director, a nomination, but nobody confirmed; Controller of the Currency, Acting Director, no one confirmed; Chairman of the NCUA, confirmed; Chairman of the SEC, confirmed; Chairman of the CFTC, confirmed; Director of the FHFA, Acting Director, no nominee; and he just nominated the insurance specialist. Five of the people on this 10-person commission are not even permanently

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