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Text of Senate bill released to replace CFPB leadership with five-person board

Posted in CFPB General

Last month, we blogged about reports that a bill (S. 105) has been introduced by three Republican Senators to change the CFPB’s single-director leadership structure to a five-person commission.

Although the bill’s text was not available when we previously blogged, we have now been able to obtain a copy of S. 105.  The bill, which was introduced by Republican Senators Deb Fischer, John Barrasso, and Ron Johnson, is entitled the “Consumer Financial Protection Board Act of 2017.”

Instead of a commission, the bill would create a bi-partisan five-member “Board of Directors” serving staggered five-year terms (with three of the initial members, including the Chairperson, to serve an initial 30-month term).  Board members would be appointed by the President, who could remove a member for “inefficiency, neglect of duty, or malfeasance in office.”  The President would be authorized to appoint a member to serve as “Chairperson of the Board.”  No more than three board members could belong to the same political party.

The CHOICE Act, the bill released in July 2016 by House Financial Services Committee Chairman Jeb Hensarling to replace the Dodd-Frank Act and passed by the Committee in September 2016, would change the CFPB’s leadership to a five-person commission (and rename the CFPB the “Consumer Financial Opportunity Commission”).  Although the CHOICE Act is expected to be reintroduced early this year, it includes a much wider range of controversial CFPB and non-CFPB changes.  Because S. 105 is limited to creating a board of directors to run the CFPB (and unlike the CHOICE Act would retain the CFPB’s name), it might provide a better vehicle for legislative compromise.