Home / Opinion / Commentary / There is no justifiable reason to change the nation’s consumer protection bureau

There is no justifiable reason to change the nation’s consumer protection bureau

Remember Bert Lance?  Probably not.  But, you may remember what he said: “If it ain’t broke, don’t fix it.”

Interesting sentiment from a bureaucrat who served as director of the Office of Management and Budget in Jimmy Carter’s administration.

“That’s the trouble with government,” he explained.  “Fixing things that aren’t broken and not fixing things that are.”

Kelly Griffith

Kelly Griffith

And, in an era of modern-day bureaucrats and elected officials hollering about bloated governments and too much bureaucracy, the very idea of changing the structure of a government agency by adding another layer of red tape and expanding its makeup is both head-scratching and counterproductive.

But that’s just what H.R. 1266 proposes for the Consumer Financial Protective Bureau (CFPB).  Originally created via the Dodd-Frank Act as a single-director commission to hold financial companies accountable and ensure consumers are treated with dignity and respect, the bureau is overseen by the Financial Stability Oversight Council, which has veto power of CFPB rulemaking.

H.R. 1266 proposes to morph the CFPB into a five-member commission appointed by the president and confirmed by the Senate with no more than three members from one political party.  When the CFPB was established, Congress debated the idea of a five-member commission and ultimately discarded the concept.

Reasons for keeping the CFPB as it is are simple and direct:

• Unlike other financial regulators, the CFPB has completed all of its mandatory rulemakings on time.

• It is moving ahead effectively with enforcement actions, discretionary rulemakings and education campaigns to make markets fairer and more transparent and to provide consumers with information they need to make wise choices.

• A single-director structure more likely decides individual issues on their own merits rather than as part of a deal involving various commissioners’ pet projects.

Similarly, reasons to avoid multi-member boards are equally straightforward:

• Multi-member boards, even with strong chair people, often fall into a pattern of gridlock.

• Changing the structure benefits powerful special interests looking to slow or limit the CFPB’s efforts to protect consumers.

• Many multiple-member boards have been hobbled for extended periods by opponents who have blocked the confirmation of commissioners.  The current congressional logjam makes it difficult enough to confirm even one director, let alone five new ones.

Cynthia Zwick

Cynthia Zwick

At the same time, the public is not demanding any such reform.  Pressure for this change is coming from the very Wall Street banks, payday lenders and other financial firms the CFPB was created to regulate.

Nearly 350 national, state and local organizations representing consumer, community, service, labor and seniors have sent a letter to Congress urging that the structure be maintained.

Having a single, strong director ensures the CFPB’s ability to achieve its original goals: implement critical reforms to protect consumers, reduce the risk of another financial or housing crisis and level the playing field between different actors in the financial services industry.

There is absolutely no justifiable reason to expand a structure that weakens an efficiently effective agency.

-Cynthia Zwick is executive director of the Arizona Community Action Association in Phoenix. Kelly Griffith is executive director of the Center for Economic Integrity in Tucson.

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