* Democrats say legislation an attempt to hurt agency
* Senate Republicans threatening to block agency leader
By Dave Clarke
WASHINGTON, July 19 The U.S. House of
Representatives is scheduled to vote Thursday on legislation to
change the way the new Consumer Financial Protection Bureau
would be run, a move Democrats contend is an attempt to weaken
the fledgling agency.
The bureau is one of the more contentious parts of the 2010
Dodd-Frank financial oversight bill and Republicans are
bringing their measure for a vote on the one year anniversary
of the legislation's enactment.
The legislation scheduled to be voted on would have the
bureau run by a five-member board rather than a single director
and make it easier for the new Financial Stability Oversight
Council to overturn bureau regulations.
The initiative has little chance of becoming law since it
would have to be approved by the Democrat-run Senate and signed
by President Barack Obama, but it highlights the tensions over
On Tuesday the sponsors of the legislation - Republicans
Spencer Bachus, Sean Duffy and Shelley Moore Capito - rejected
Democrats' complaints that they want to "defang" the agency
arguing their proposals are intended to make the agency more
like other financial regulators.
Bachus, who chairs the House Financial Services Committee,
said he does not oppose the bureau and that his concern is that
the agency needs to give more weight to how its rules could
hurt banks' ability to stay in business.
"I think these changes would mitigate these concerns," he
Bachus broke with many fellow Republicans saying he does
not think it is necessary for the agency to have its budget
approved each year by Congress through the annual
"I, for one, much prefer fixing the structure of the CFPB
than starving them for funding," he said.
The bureau, which is charged with protecting U.S. consumers
from abusive mortgage lending practices and hidden credit card
fees, will get its funding from the Federal Reserve under the
Requiring the CFPB to have its budget approved by Congress
is one of three changes Senate Republicans are insisting upon
before they remove their threat to block any nominee to head
On Monday, President Obama nominated former Ohio Attorney
General Richard Cordray to be the agency's first director.
If the administration does not agree to change how the
bureau is funded, have it run by a board and give FSOC more say
over CFPB rules, then Cordray's nomination is "dead on
arrival," Senator Jerry Moran, a Republican from Kansas, said
at a Senate Banking hearing on Tuesday.
Republicans and the banking industry have disparaged the
consumer agency as an unnecessary layer of regulation that, if
overzealous, could restrict consumer choice and lending.
Democrats have scoffed at these concerns, saying the agency
was created to protect consumers against unfair practices that
occurred in the run up to the 2007-2009 financial crisis.
(Reporting by Dave Clarke; Editing by Tim Dobbyn)