On May 24, 2016, the House Appropriations Committee released its Fiscal Year 2017 Financial Services Bill (FY17). Aside from its usual job, to appropriate money from the yearly budget, the bill seeks to increase oversight over the Consumer Financial Protection Bureau (CFPB).
So what will this increased oversight look like? The relevant provision in FY17 details a three-part strategy for regulating the CFPB:
- According to the bill, the CFPB’s funding will be subject to the annual congressional appropriations process. Due to Dodd-Frank, funding is currently given to the CFPB directly from the Federal Reserve. Channeling the money through the appropriations process instead will require the CFPB to be accountable for, and transparent with, their use of tax dollars. The CFPB will have to explain what funds are needed, why they are needed, and how they were used.
- The CFPB will be required to explore pre-dispute arbitration options before issuing and enforcing a regulation. A provision of the bill states that no funds given to the CFPB “may be used to regulate pre-dispute arbitration agreements…and any regulation finalized by the Bureau to regulate pre-dispute arbitration agreements shall have no legal force or effect until the requirements regarding pre-dispute arbitration specified in the report accompanying [the bill] under the heading “Bureau of Consumer Financial Protection” are fulfilled.”
- The legislation also seeks to change the way leadership is structured within the CFPB. Instead of having a single Director, it would be run by a five-member Commission. The member of the Commission would be appointed by the President.
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