Apr 7, 2011Press Release

WASHINGTON, DC — U.S.Congressman Sean Duffy (WI-07), a member of the Financial Services Committee and the Joint Economic Committee, has introduced H.R. 1315 to strengthen the Financial Stability Oversight Council’s (FSOC) review authority over the Consumer Financial Protection Bureau.

Yesterday, the House Financial Services Subcommittee on Financial Institutions and Consumer Credit held a hearing on legislative proposals to improve the structure of the Consumer Financial Protection Bureau.  H.R. 1315 was one of the bills discussed. 

Duffy said, “The authoritarian structure of the CFPB is very troubling.  This new agency has broad, far-reaching powers and these powers are all assigned to one individual, who is a political designee.  I believe in the system of checks and balances, and I also believe that consumers deserve a financial system that is safe, sound and accountable.  For these reasons, I introduced H.R. 1315.”

Congresswoman Shelley Moore Capito, the Chairman of the Financial Institutions and Consumer Credit Subcommittee said: “Rep. Duffy is to be commended for his leadership in introducing H.R. 1315. In his first few months as a member of the Financial Institutions Subcommittee, he has been a strong voice for his constituents in Wisconsin.”

H.R. 1315 would amend Section 1023 of the Dodd-Frank Act to streamline the FSOC’s process for reviewing CFPB regulations.  The legislation would change the vote required for the FSOC to set aside a harmful CFPB regulation from two-thirds to a simple majority.  Also, to ensure the objectivity of the vote, the legislation would exclude the CFPB Director from voting on whether to set aside his or her own regulation.

“The reality is, there is already a disturbing lack of Congressional oversight regarding the CFPB,”Duffy continued. “And the one body charged with reviewing the CFPB’s actions is hamstrung in its ability to effectively review and overturn harmful consumer regulations.”

In addition to requiring an impossibly high vote threshold, the Dodd-Frank Act also forces the FSOC to meet a very high standard before it can overturn a harmful CFPB regulation  The Dodd-Frank Act states that the FSOC ‘may’ act if a rule “would put the safety and soundness of the U.S. banking system or the stability of the financial system of the U.S. at risk”.  H.R. 1315 amends Dodd-Frank to require the FSOC to intervene if a CFPB regulation is inconsistent with the safe and sound operations of U.S. financial institutions.

Duffy noted: “I was pleased to hear that all the witnesses yesterday agreed that the safe and sound management of our financial system is essential to economic stability and that this goal goes hand in hand with creating an effective consumer protection system.  The American people expect accountability from such a powerful and important new government agency and the bills discussed today strengthen that level of accountability.”

“H.R. 1315 enhances the ability of the Financial Stability Oversight Council to ensure that the Consumer Financial Protection Bureau’s regulations protect consumers without jeopardizing the safety and soundness of financial institutions,” added Capito.

“I look forward to working with Chairman Bachus and Chairman Capito on moving this bill through the Committee process,” Duffy concluded.