U.S. Chamber Expresses Disappointment in Move to Advance CFPB Director Nomination

Hirschmann Describes Mark Up as ‘Another Move That Bypasses Repeated Attempts to Seek Answers to Basic Questions of How This Agency Will Work’

WASHINGTON, D.C.—David Hirschmann, president and CEO of the U.S. Chamber’s Center for Capital Markets Competitiveness, today issued the following statement on the move by the Senate Banking Committee to vote on Richard Cordray’s nomination to be director of the Consumer Financial Protection Bureau (CFPB):

“We are disappointed that the Committee’s majority members decided to move forward with the director nomination without taking seriously the calls for reforms that would institute much-needed traditional, longstanding checks and balances. The Chamber believes the CFPB can play an important role by simplifying disclosure for consumers and by streamlining the complicated multi-agency regulatory system faced by companies doing business in the consumer finance space, but there is also the potential for the Bureau to become an impediment to economic growth and job creation. Today’s vote will do nothing to help us get answers to basic questions we have about how this agency will work.

“Unfortunately, the confirmation process for the director is the Senate’s only chance to provide effective oversight over this new half a billion dollar federal agency. Other independent agencies are either led by a five person commission, have multiple Senate confirmed positions, and are subject to Congressional funding. As the only Senate confirmed position in the entire agency, once confirmed, the single CFPB director will have unprecedented powers with virtually no checks and balances.

“It is neither good public policy nor common sense to suggest no changes to a structure that allows a single, irremovable individual to dictate terms or even ban consumer financial products, have access to more than half a billion dollars in funding per year outside the budget process, and make decisions that could undermine safety and soundness of financial institutions.

“To date, the CFPB has failed to answer critical questions about how it will operate and interpret its authority, regardless of its governance structure or funding. It was created to consolidate consumer financial protections under one roof, but we still do not know how the CFPB will prevent duplicative or even contradictory enforcement policies at the federal level, given the jurisdiction of the Federal Trade Commission, or at the State level, where 51 Attorneys General are now empowered to apply their own interpretations of CFPB standards. We still do not know whether the CFPB intends to use this standard to limit choice in the market for consumer products and services, or whether small businesses will find it even tougher to access credit as the CFPB tightens standards.

“These are just a few of the unknowns facing businesses and consumers as a result of the CFPB’s broad reach and powers. The best hedge against excessive, duplicative, or wrongheaded regulation is balanced leadership, and strong Congressional oversight, particularly through the budget process. We strongly support the efforts of those in the House and Senate who have called for these and other structural reforms, and urge the President and Senate Democrats to agree to these commonsense changes to improve the operation of the Bureau over the long term.”

Since its inception three years ago, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems that have governed our capital markets. The CCMC is committed to working aggressively with the administration, Congress, and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.