A spending bill that funds agencies that oversee the financial industry will offer Congress one of its last opportunities to undercut President Barack Obama’s financial overhaul before the November elections.
Financial interests are pushing for big changes, championed mostly by Republicans, to the Consumer Financial Protection Bureau in the $21.7 billion House Financial Services draft appropriations bill. The debate will also give Democrats a chance to rail against big financial firms and reinforce a popular campaign theme.
In addition to the CFPB, which was authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act, financial industry lobbyists say they’re pushing for changes to insurance regulations and to the Financial Stability Oversight Council, which monitors the stability of the financial system.
“This particular bill is a magnet for Wall Street’s lobbyists and Wall Street’s allies,” said Dennis Kelleher, president and CEO of Better Markets, who supports Dodd-Frank.
The draft bill approved by the House Appropriations Financial Services subcommittee Wednesday included a provision that would change the CFPB from a director-led agency to a bipartisan commission, and language that would make funding for the bureau subject to the annual appropriations process. Both measures largely pit supportive Republicans against Democrats.
Richard Hunt, president and CEO of the Consumer Bankers Association, said Democrats should find such changes palatable with the possibility of presumptive GOP nominee Donald Trump winning the presidency.
CFPB Director Richard Cordray’s term expires in 2018, when the next president could install someone hostile to financial regulations, Hunt said.
“We have never called for the end of the CFPB; we have only called for a bipartisan commission,” Hunt said. “I bet a lot of Democrats change their minds after Trump wins.”
Better Markets’ Kelleher opposes any revisions to the CFPB’s structure regardless of who is elected president. “Wall Street is trying to gut and neuter the CFPB with these changes,” he said.