Oversight of the Consumer Financial Protection Bureau (Bureau) by the U.S. House of Representatives is expected to become more aggressive when the 116th Congress convenes in January 2019. On December 11, 2018, members of the new Democratic House majority nominated Representative Maxine Waters to chair the House Financial Services Committee, which oversees the Bureau. During Rep. Waters' time as ranking member on the Committee, she heavily criticized many of the changes Acting Director Mick Mulvaney made at the Bureau. Mayer Brown summarized those changes in a recent Legal Update.
As chair, Rep. Waters will set the Committee agenda, enabling her to turn her criticism into more direct pressure on the Bureau and its new Director Kathleen Kraninger. Proposed legislation sponsored by the incoming chair may hold some clues to the actions the Committee may take.
In September 2018, Rep. Waters introduced the Consumers First Act. The bill is largely designed to restore the Bureau to how it looked and functioned before Acting Director Mulvaney's tenure. Some of its major topics include the following:
- The Bureau's organizational structure. Acting Director Mulvaney moved the Bureau's Office of Fair Lending and Equal Opportunity from the Division of Supervision, Enforcement, and Fair Lending, where it had supervisory and enforcement authority, to the Office of the Director, where it serves as solely a policy office. Separately, the Acting Director moved the Office of Students and Young Consumers into the Bureau's financial education office. The Consumers First Act would restore and clarify the offices' roles, grant each office supervisory and enforcement responsibilities, and restrict the Director's ability to reorganize certain Bureau offices.
- Public access to the Bureau's consumer complaint database. In March 2018, the Bureau issued a request for information regarding its public reporting of consumer complaint information. Acting Director Mulvaney also suggested he would consider changes to the Bureau's policy of publishing consumer complaint information. The Consumers First Act would require the Bureau to keep the consumer complaint database public and easily accessible through the Bureau's website.
- The Consumer Advisory Board. In July 2018, Acting Director Mulvaney dismissed all members of the Consumer Advisory Board (Board). The bill would restrict the Bureau Director's ability to remove members from the Board or change the Board's charter, and would require the Director to attend Board meetings.
- The Bureau's oversight of Student Lending. In August 2018, the Bureau's Assistant Director and Student Loan Ombudsman submitted his resignation letter in which he alleged that changes made to the Bureau under Acting Director Mulvaney undercut the Bureau's oversight of student lending. The Consumers First Act would require the Director to provide information related to those allegations to the Bureau's oversight committees.
In some cases, Rep. Waters may be able to accomplish the bill's aims through her powers as chair. For example, a strong possibility exists that Director Kraninger will be asked to produce documents and testimony related to the Bureau's oversight of student lending in response to the allegations cited above. On other issues, the new committee chair's options are more limited. Forced changes to the Bureau's structure, for example, could require new legislation, which would be difficult with a Republican Senate.
Despite those limitations, as chair, Rep. Waters is likely to ramp up public and political pressure on the Bureau in the areas she chooses. Such pressure could result in adjustments to the Bureau's direction, policies, or priorities and it will be important to monitor the Committee's agenda going forward.
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