The U.S. House passed a bill Thursday that reforms financial reforms that have been on the books for a year.
The “Consumer Financial Protection Safety and Soundness Improvement Act of 2011” was Representative Sean Duffy’s first piece of legislation since he took office in January. The freshman Republican from Ashland introduced it in April.
The measure replaces the director of the Consumer Financial Protection Bureau with a five-member bipartisan commission. And it gives the council greater leeway in overturning regulations that threaten the safety of the U-S banking system.
“In the end, in a representative democracy, we can’t advocate these roles to agencies but then we can’t reach if we don’t like what they’re doing,” Duffy said by phone after the vote.
Duffy thinks the Senate will pass the bill and President Obama will sign it because he supported the commission when the Dodd-Frank Wall Street reforms were passed a year ago.
“Part of getting our economy growing again and getting our people back to work means unraveling the burdensome mandates and regulations that are not just causing uncertainty in the marketplace, but killing jobs in America,” Duffy wrote in an opinion published Wednesday in the Washington Times.
He said the new consumer agency could actually slow economic recovery because it would cause small banks and credit unions to spend an estimated 2.2 million labor hours on compliance.
“Those are hours that your local bank or credit union will spend dealing with some Washington bureaucrat instead of focusing on the needs of customers like you,” Duffy wrote.
Duffy argued that he is not trying to kill the agency; instead he is trying to reform it to recognize “the reality that we cannot separate consumer protection from the safety and soundness of the banking system.”
The House vote comes less than a week after President Obama nominated former Ohio attorney general Rich Cordray to lead the consumer protection bureau. Obama passed over Elizabeth Warren, a Harvard professor who helped establish the bureau, because she is weighing a possible U.S. Senate run in Massachusetts.