The new Consumer Financial Protection Bureau will give other regulators the chance to focus on their core mission, expand consumer choice and be heavily accountable to Congress, Deputy Treasury Secretary Neal Wolin said Tuesday
“The existence of the CFPB allows prudential regulators (such as the NCUA) to focus on their core tasks – making sure that banks have the capital, the liquidity, and the risk-management tools to ensure safety and soundness in the system. It allows the CFPB to focus on its own single task – to make sure that consumer financial products are offered in a fair, transparent and competitive way,’’ he said during a speech on the progress of implementing the financial overhaul bill passed last year.
Wolin didn’t address concerns raised by credit union and bank lobbyists that the new bureau would add to the regulatory burden of financial institutions.
He predicted the bureau will cause consumers to be better informed, causing financial institutions to offer better products and be a catalyst for innovation.
He also refuted criticisms made by congressional Republicans that the bureau, which is scheduled to begin operating this summer, would not be held accountable for its actions.
“The CFPB must submit annual reports to Congress, the director must testify multiple times each year on the agency’s budget and activities, and the GAO (Government Accountability Office) audits the CFPB’s expenditures annually,’’ Wolin added. “The FSOC (Financial Stability Oversight Council) can review and even reject the CFPB’s rules, and, as with any other regulator, Congress has the ability to overturn any of the CFPB’s rules.”
House Republicans have introduced legislation that would have the bureau governed by a five-member board, rather than a director. In addition, they are pushing a bill that would allow the FSOC (of which the NCUA chairman is a member) to overturn bureau regulations by a majority vote, rather than the current two-thirds margin.