It's been 100 days since the Consumer Financial Protection Bureau opened its doors -- an occasion that a House subcommittee marked by grilling interim director Raj Date for two hours this morning.
The reception accorded Date was marginally more polite than that given his predecessor, Elizabeth Warren, during her appearances on Capitol Hill (no one called him a liar). But Republican members of the Financial Institutions and Consumer Credit Subcommittee used the hearing to voice now-familiar complaints about the structure and power of the bureau.
“There is little or no oversight of this agency,” said Rep. Blaine Luetkemeyer (R-Mo.). “There’s no doubt it will change the way the private sector operates…but I remain unconvinced it will do so in a way that truly benefits the American people.”
Rep. Sean Duffy added, “The CFPB has an incredible amount of power….Who has been elected to run this agency?”
Republicans in Congress are pushing to restructure the bureau as a bipartisan commission, akin to the U.S. Securities and Exchange Commission, and 44 senators have vowed to block confirmation of any director until that happens. Former Ohio Attorney General Richard Cordray, now head of enforcement at the bureau, has been nominated for the position.
In the meantime, Date, whose formal title is Special Advisor to the Secretary of the Treasury for the Consumer Financial Protection Bureau, is in charge. (In one of the less-courteous exchanges, Thaddeus McCotter (R-Mich.) informed him, “You may be doing the best you can, but that doesn’t mean it’s good enough.”)
When pressed about the bureau’s structure and whether it should be a commission, Date reminded members that they themselves created the agency by passing the Dodd-Frank Act last year. “Congress deliberated and debated various governance mechanisms…and came to a conclusion. My job is to take the structure and make it work.”
Rep. Barney Frank (D-Mass.), who co-authored Dodd-Frank, blasted Republicans for suggesting the bureau is more powerful than other financial regulators. “I’m struck by how few of my colleagues ever seem to have heard of the Comptroller of the Currency,” Frank said, noting that that office is also run by a single director. “This hearing should have been on Halloween,” he continued, given the “series of spooks and goblins” being conjured up.
Date in his opening remarks gave committee members an update on the bureau’s activities. The agency has hired 700 employees, about half of whom were transfers from other agencies. During its first three months, the bureau has begun site examinations at the largest banks; is working on a single, shorter mortgage disclosure form; created a draft one-page “financial aid shopping sheet” for student loans; and released examination procedures for mortgage servicing.
Date said that without a confirmed director in place, supervisory authority is limited by statute to depository institutions with more than $10 billion in assets—about 100 banks. “The bad news is that tens of thousands of consumer financial products firms that are supposed to be within the supervisory authority of the bureau are not, without a director,” he said.