What Does Congress Want From A Consumer Financial Protection Agency?

If you have a lot of time on your hands, you could probably read through the House and Senate versions of the financial reform bill, and get some idea of how each one addresses consumer financial protection. Or, you could just hope that a consumer lawyer would do it for you, and then summarize his findings in a tidy PowerPoint presentation. Guess what? Jeff Sovern of St. John’s University Law School and the Consumer Law and Policy Blog has done just that.

Sovern’s 58-page deck doesn’t include some late Senate amendments, but does break down a lot of the key issues, including how each house would like the new Consumer Financial Protection Agency (or Bureau, in the Senate version) to operate. One key difference: how the agency will be structured:

Structure Under the House Bill

♦ Initially a Director, nominated by the President and confirmed by the Senate with “strong competencies and experiences related to consumer financial protection.”

♦ 30 months after the bill is enacted, the director is succeeded by a Commission of 5 members, appointed by the president and confirmed by the Senate, with “strong competencies and experiences related to consumer financial protection.”

♦ Commissioners have five-year staggered terms; no more than three of the same political party.

♦ Removable only for cause.

Structure under the Senate bill
♦ CFPB to be housed in the Fed
♦ CFPB to be headed by Director appointed by President and confirmed by the Senate.
♦ No requirement that Director be consumer protection expert.
♦ Director to have 5-year term and can be removed for cause.

Sovern also includes links to the full text of the bills, so if your idea of a good weekend read is about 3,000 pages of legislation, have at it.

Consumer Financial Protection Agency/Bureau (PPTX File) [Jeff Sovern]