What a difference a day can make—particularly an election day! November 4, 2014 was a good day for the Consumer Finance Industry.
The leadership of the Republican Party has long complained about the lack of Congressional oversight of the Consumer Financial Protection Bureau. This lack of oversight is intentionally imbedded in the Dodd-Frank Act itself. That is, the CFPB really does not come to Congress for funding. Instead, its funding is derived from a percentage of the Federal Reserve Board’s annual funds and from the penalties that the CFPB extracts. Further, with the very limited duty of the U.S. Senate to advise and consent to the appointment of the Director whose term is 6 years, there is nothing else meaningful for Congress to do to influence the direction of the CFPB.
Maybe this all changes January 3, 2015.
That is the day that the 114th United States Congress convenes. The Republicans will now control the Senate as well as the House of Representatives. It is reasonable to expect that the efforts of the Consumer Finance Industry to amend the Dodd-Frank Act over the last several years may now result in some legislative fixes to the Act. Of course, President Obama will still be in the position to veto legislation that he opposes, and the Dodd-Frank Act is one of his two signature pieces of legislation that will not be amended easily. However, the political calculous has changed dramatically since November 3, 2014.
And, if a Republican-dominated Senate Banking Committee and House Financial Services Committee bring forth legislation that offers reasonable changes in Dodd-Frank, the President may be in the position of having to accept those changes.
Will the CFPB be subject to the will of the 114th Congress? As the Zen Master says, “We’ll see.”