House Financial Services Committee to hold CFPB reform hearing

The House Financial Services Subcommittee on Financial Institutions and Monetary Policy announced this week that it will hold a hearing on ways to reform the Consumer Financial Protection Bureau (CFPB).

The hearing, “Consumer Financial Protection Bureau: Ripe for Reform,” is expected to discuss “the leadership structure, funding, budget, and operations of the CFPB and areas in which reforms are needed,” according to a committee memorandum.

This will mark the first hearing by the House Financial Services Committee since Republicans assumed control of the House of Representatives in January. The chairman of the subcommittee is Rep. Andy Barr of Kentucky and the ranking member is Rep. Bill Foster of Illinois.

The witnesses will include American Financial Services Association CEO Bill Himpler, Patomak Global Partners Managing Director Brian Johnson and Minnesota Attorney General Keith Ellison. The witness list also includes two attorneys from the right-leaning Pacific Legal Foundation and the Competitive Enterprise Institute.

The hearing will take place as the U.S. Supreme Court prepares to hear arguments related to the CFPB’s constitutionality. Many of the issues core to the Supreme Court hearing are also slated to be discussed in the committee memorandum for the hearing.

“The CFPB operates outside of the annual Congressional appropriations process. Instead, it receives funding through direct transfers from the Federal Reserve, which is also not subject to the appropriations process,” the memorandum reads. “The Fed does not exercise authority over the CFPB or its budget. The CFPB director is required only to submit a letter to the Federal Reserve Board each quarter certifying the amount of funds that are ‘reasonably necessary’ for carrying out the authorities of the Bureau.”

Such attributes are at the core of several pieces of legislation proposed by Republicans aiming to reform the CFPB which will be discussed by the House Financial Services Committee.

These include a proposal to establish an “Office of Economic Analysis” within the CFPB; a proposal to eliminate provisions that fund the CFPB using transfers from the Federal Reserve; a proposal to establish a separate Office of Inspector General for the CFPB; and minimum information to be included in any proposed rule-making by the CFPB.

The hearing is scheduled for March 9 at 10:00 a.m. EST and will be live-streamed on the Committee’s website.

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