WASHINGTON — The House Financial Services Committee is seeking public comment on a discussion draft of legislation that would significantly overhaul the structure, authority and oversight of the Consumer Financial Protection Bureau following a recent committee hearing on the agency’s future.
According to the committee, comments on the proposal are due by Aug. 21 and may be submitted to the committee as lawmakers consider potential changes to the CFPB’s governance, regulatory authority, supervision and enforcement practices.
The discussion draft is organized into five sections:
Title I: Reforming Bureau Governance
The committee said the proposal would make several structural changes to the CFPB intended to increase accountability and consistency, including:
- Bringing the CFPB under the congressional appropriations process.
- Reforming the agency’s use of civil penalty funds.
- Strengthening cost-benefit analyses and small business impact assessments during rulemaking.
- Requiring periodic retrospective reviews of major regulations.
- Creating a dedicated CFPB Inspector General.
The committee is seeking public feedback on:
- Additional structural reforms that could reduce regulatory uncertainty across presidential administrations.
- Ways to improve the quality and transparency of the CFPB’s rulemaking process while maintaining efficiency.
- Additional reforms to strengthen retrospective reviews and eliminate outdated regulations.
Title II: Restoring Clarity and Procedural Fairness
The proposal would clarify several statutory authorities governing the CFPB, particularly its authority to regulate unfair, deceptive or abusive acts or practices (UDAAP). It would also:
- Add procedural safeguards for enforcement actions.
- Clarify statutes of limitations.
- Define jurisdictional boundaries involving attorneys and state-regulated insurance companies.
The committee is asking whether:
- Additional statutory definitions should be clarified to improve regulatory certainty.
- Other procedural safeguards would improve fairness and predictability during CFPB supervision and enforcement.
- Congress should further clarify the CFPB’s jurisdiction.
Title III: Promoting Innovation in Consumer Financial Markets
According to the committee, this section is intended to promote innovation and expand consumer access to financial products and services by:
- Providing greater clarity for certain small-dollar loan products offered by depository institutions.
- Requiring federal agencies to clearly distinguish non-binding regulatory guidance from legally enforceable requirements.
The committee requested feedback on:
- Regulatory barriers that most limit innovation in consumer financial products and services.
- Additional regulatory changes that could encourage more small-dollar lending while increasing competition and consumer choice.
- Further measures to distinguish agency guidance from binding regulatory requirements.
Title IV: Promoting Effective, Predictable Supervision
The proposal would modify the CFPB’s supervisory framework by:
- Adjusting supervisory asset thresholds for banks and credit unions.
- Allowing certain institutions to elect consumer compliance supervision and examinations by their prudential regulator instead of the CFPB.
- Strengthening coordination among federal financial regulators.
- Narrowing the CFPB’s authority to supervise nonbank financial companies.
The committee is seeking comments on:
- Additional ways Congress could improve coordination among the CFPB, prudential regulators and state regulators.
- Whether the proposed supervisory thresholds and supervisory election framework are appropriately calibrated.
- Additional reforms that would make CFPB supervision more risk-based, efficient and predictable.
- How Congress should balance effective consumer protection with reducing duplicative regulatory oversight.
Title V: Preventing Regulation by Enforcement
The final section aims to reduce reliance on enforcement actions to establish regulatory policy. The proposal would:
- Reform civil money penalties.
- Modify the CFPB’s market monitoring authorities.
- Index regulatory thresholds.
- Improve the agency’s consumer complaint procedures.
The committee is requesting input on:
- Additional reforms that would reduce reliance on enforcement actions to establish regulatory expectations.
- Ways Congress can encourage voluntary compliance and self-reporting while maintaining accountability.
- Additional improvements to the CFPB complaint process for consumers and financial institutions.
- Measures Congress should adopt to better protect sensitive consumer data maintained by the CFPB.
The House Financial Services Committee said members of the public may submit comments and responses to the discussion draft’s questions through Aug. 21 as lawmakers consider legislation to reform the CFPB’s governance, regulatory framework, supervisory authority and enforcement powers.
