House Passes Consumer Financial Protection Bureau Reform Bill

by Troutman Sanders CFPB Team

The House passed H.R. 1315 on July 21, 2011 largely along party lines.  The measure was touted by many House Republicans as a necessary step to reign in the Consumer Financial Protection Bureau (CFPB)'s purportedly expansive regulatory authority and other threats to accountability created by the its single director structure.

Notably, H.R. 1315 would amend Section 1023 of the Dodd-Frank Wall Street Reform and Consumer Protection Act by: (1) lowering the threshold required to set aside CFPB's proposed regulations from a two-thirds vote of the Financial Stability Oversight Council's ("FSOC") voting membership to a simple majority, excluding the Director of the CFPB; (2) clarifying that the FSOC must set aside any CFPB regulation that is inconsistent with the safe and sound operations of U.S. financial institutions; (3) eliminating the 45-day time limit for the FSOC to review and vote on CFPB regulations; (4) requiring that all FSOC meetings be open to the public whenever it decides to stay or set aside a CFPB regulation; and (5) establishing a bi-partisan, five-member Commission (consisting of a Chairman and four additional members) to carry out all of the duties that would otherwise fall to the Director of the CFPB.  The bill would also amend Section 1062 of the Dodd-Frank Act to delay any further transfer of powers to the CFPB until the later of the following either July 21, 2011or the date on which the Chair of the Commission of the Bureau is confirmed by the Senate.

The White House has vowed to veto H.R. 1315 if it were to reach the President's desk, and Senate Banking Committee Chair Tim Johnson (D-South Dakota) has long criticized H.R. 1315 as an attempt to undermine the CFPB making passage of the bill highly unlikely.

Read more at Consumer Financial Protection Bureau Report by Troutman Sanders LLP.

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