The U.S. House Financial Services Subcommittee on Financial Institutions and Consumer Credit held a hearing titled “Examining Regulatory Burdens on Non-Depository Financial Institutions.”
The hearing examined the “rising compliance costs” to consumers, non-depository financial institutions and the U.S. economy that were brought about by Dodd-Frank. Specifically, witnesses testified as to whether products or services were no longer being offered to consumers because of agency actions and the impact that not having access to specific products or services might have on consumers.
Witnesses at the hearing encouraged Congress to change the governance structure of the Consumer Finance Protection Bureau (“CFPB”) to a five-member commission rather than a single governing chair. Witnesses agreed that the CFPB should adopt a non-enforcement period extending through the end of 2015 as the new statutory deadline for integrated disclosure requirements.
Lofchie Comment: A five-member commission, split between two parties with the President’s party holding the majority, serves the interests of all who believe in governmental transparency and healthy debate. As a practical matter, the minority party would not be able to disrupt or stall the agency since the chair controls virtually all of the resources of the agency and the majority party would control the votes. The benefit of having a minority party is simply that it would create the potential for a public debate. Without the possibility of dissent, nothing prevents the chair of an agency from being overly enthusiastic when describing the work done by the agency, the rules to be adopted or the rules to be rescinded. Ideally, regulators should be subjected to discord in the form of a dissenting opinion or two.