Nearly every Republican senator is vowing to block any presidential nominee to head the new Consumer Financial Protection Bureau (CFPB) unless major changes are made to the agency.
In a letter sent to the president Thursday, 44 GOP senators said that any pick to become the first director of the CFPB, regardless of political affiliation, will be unacceptable unless the bureau is significatly altered to reduce its "unfettered authority."
"The Dodd-Frank Act failed to provide any real checks on the CFPB director’s powers. Once confirmed, the director effectively answers to no one," the lawmakers wrote.
The demands sets up a high stakes showdown between the Senate GOP and the White House, which has yet to name a nominee even as the CFPB works to get up and running by July.
"The CFPB as created by the deeply-flawed Dodd-Frank Act is set to be one of the least accountable and most powerful agencies in Washington," said Senate Republican Leader Mitch McConnell (R-Ky.). "The reforms outlined are necessary before we will consider any nominee to head this agency.”
"This about accountability," added Sen. Richard Shelby (R-Ala.), the ranking member of the Senate Banking Committee. "The bureau, as currently structured, lacks any semblance of the checks and balances inherent in the Constitution."
Specifically, the lawmakers are demanding the top of the CFPB be changed so that instead of being run by a single director, it is headed by a board of directors. They also want the CFPB's budget to fall under the jurisdiction of Congressional appropriators — currently the CFPB is set up to receive its budget from the Federal Reserve. And finally, they want other regulators to be able to block CFPB regulations if they deem it could endanger the safety and soundess of banks.
The list of demands is comparable to legislation currently pending in the House and Senate that would curb the CFPB's power. A subcommittee of the House Financial Services Committee advanced three bills Wednesday that would make similar changes, and companion legislation has been introduced in the Senate.
Congressional Democrats have blasted the bills as surreptitious attempts to kill the agency before it is started. And CFPB architect and presidential advisor Elizabeth Warren has said any attempts to change the agency are mere efforts to "defund, delay and defang" the bureau, which was hotly contested by the GOP in the debate over the Dodd-Frank financial reform law that created it.