House Panel Approves Changes to New Consumer Financial Protection Bureau, Extends Flood Insurance Program
The House Financial Services Committee on Friday passed a bill extending the National Flood Insurance Program for five years and three bills to make changes to the structure of the Consumer Financial Protection Bureau.
CUNA and NAFCU supported the flood insurance measure and backed an amendment by Rep. Frank Lucas (R-Okla.) that would clarify existing law that allows lenders to collect premiums for force-placed flood insurance during the 45-day notification period in the instance when a borrower allows his or her policy to lapse.
The trade associations contend that the clarification is needed because credit unions participating in the program assume the risk of property damage during the notification period.
The panel was also approved bills, along party lines, to make several changes to the consumer bureau, which is supposed to begin operation in July.
The changes, which were supported by committee Republicans and opposed by Democrats, would have the bureau run by a five-member board rather than a director; allow the bureau’s decisions to be overturned by a majority vote of the Financial Stability Oversight Council rather than two thirds; and delay the startup of the bureau until a director is in place.
Committee Republicans, who backed the change, noted that Democrats had originally supported having the board governed by a five-member panel. The financial overhaul bill originally passed by the House contained that structure but it was changed on the Senate to have the bureau run by a director.
NAFCU supported the measure to change the number of votes needed to overturn a regulation approved by the bureau and CUNA didn’t take a position.
The CFPB will be an independent agency housed inside the Federal Reserve and run by a director appointed by the president and confirmed by the Senate. President Obama hasn’t nominated a director but has named Harvard Law School Professor Elizabeth Warren to be in charge of the agency’s set up.
The Republicans have a majority in the House and the bills will likely pass in that chamber. However, Democrats who control the Senate have shown little appetite for the legislation. Senate Republicans said they would block the confirmation of a director for the bureau unless substantial changes are made to its structure.