WASHINGTON -- Republicans don’t even want public advocate Elizabeth Warren to head a watered-down Consumer Financial Protection Bureau.
At least that’s what Democrats tried to show Wednesday with a number of amendments to three Financial Services bills that aim to alter the nascent CFPB. The Democratic measures were all nixed by the GOP.
One amendment would have required Congress to name Warren the head of the bureau once she finishes the job of creating it and getting it running by July. The provision, offered by CFPB proponent Rep. Carolyn Maloney (D-N.Y.), was designed to put Republicans, who have vehemently opposed Warrenin the past, on the spot.
"This debate is clearly about Elizabeth Warren, so let's make it about her," said Maloney, the top Democrat on the Financial Institutions and Consumer Credit Subcommittee.
The amendment, which said the top job had to be filled by the person "credited with coming up with the idea" for the CFPB, failed on a party-line vote.
It was offered to a bill that would, among other things, turn the bureau into a commission with five members leading it. Subcommittee Chairwoman Shelley Moore Capito (R-W.Va.) argued that a commission offers greater stability in the leadership than a single boss.
"If they’re going to make it a commission, at least put someone in the chair’s seat who has been the vision behind it and can make it work," Maloney told The Huffington Post after the heated hearing.
Another GOP bill aims to make it easier for the Financial Stability Oversight Commission to overrule decisions that the CFPB might make in favor of consumers. It would require a simple majority vote by the FSOC, instead of a two-thirds majority.
That bill would also change language in current law to give the FSOC authority to protect not just the "safety and soundness” of the U.S. financial system -- a key goal of the Dodd-Frank legislation passed last year -- but of individual institutions.
Republicans argued that the changes the bill would produce would make the consumers’ bureau more transparent and accountable, and protect more small banks.
Democrats contended that the revisions would only weaken the CFPB, and give financial institutions a stronger say.
To prove Democrats’ point, Maloney offered another amendment that would have defined the "safety and soundness" mentioned in the proposal to exclude profits. Her point was that consumer-friendly decisions generally come at the expense of profits, and -- if profitably is a standard -- there would be a ready rationale to overturn almost any CFPB rule or finding.
"I am not saying that a financial institution should not be able to make a profit," Maloney said in the hearing. "I am simply saying that, if you are going to put an extraordinary check on the CFPB’s ability to protect consumers, then a financial institution’s profitability should not come at the expense of consumers.”
The amendment also failed, while the subcommittee passed the three GOP-sponsored bills. The third aims to delay the July 21 starting date for the CFPB. The full Financial Services Committee is expected to consider the bills next week.
Democrats in the Senate will likely squash the measures there, but they could be offered as amendments to larger pieces of legislation.
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