Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

Hmmm. If the CFPB funding structure is ruled by SCOTUS as unconstitutional, will there finally be a resolution in Congress to "decide the future of the GSES"?

"A subcommittee of the House Financial Services Committee is considering nearly 10 legislative proposals to change the nearly 13-year-old Consumer Financial Protection Bureau, as Republicans and critics outside the Capitol accuse the agency of overreach, insufficient rulemaking and a lack of accountability. Members heard testimony from several witnesses who defended or condemned the agency’s practices."

https://www.cnbc.com/2023/03/09/house-hearing-targets-cfpb-over-junk-fees.html

"MEMORANDUM

To: Members of the Committee on Financial Services
From: FSC Majority Staff
Date: March 6, 2023
Re: March 9, 2023 Subcommittee Hearing: “Consumer Financial Protection Bureau:
Ripe for Reform”

On Thursday, March 9, 2023, at 10:00 a.m. in Room 2220 of the Rayburn House Office
Building, the Financial Services Subcommittee on Financial Institutions and Monetary Policy
will hold a hearing titled “Consumer Financial Protection Bureau: Ripe for Reform.” The
following witnesses will testify:

• Bill Himpler, CEO, American Financial Services Association
• Brian Johnson, Managing Director, Patomak Global Partners LLC
• Jessica Thompson, Attorney, Pacific Legal Foundation
• Devin Watkins, Attorney, Competitive Enterprise Institute
• The Honorable Keith Ellison, Attorney General, State of Minnesota

Background

The hearing will examine the leadership structure, funding, budget, and operations of the CFPB
and areas in which reforms are needed.
The Dodd-Frank Act established the CFPB as an independent agency.1

Unlike other federal
financial agencies, the CFPB does not have an executive board, does not have an independent
Inspector General, and does not allow for meaningful oversight of the director. The CFPB is led
by a single director who is appointed by the president and confirmed by the Senate for a term of
five years. The Dodd-Frank Act stated the President may only remove the director from office
for cause, i.e. “inefficiency, neglect of duty, or malfeasance in office.”2

On June 29, 2020, the
Supreme Court ruled in Seila Law LLC v. Consumer Financial Protection Bureau that the
CFPB’s leadership structure is unconstitutional as a violation of the separation of powers.3

The CFPB operates outside of the annual Congressional appropriations process. Instead, it
receives funding through direct transfers from the Federal Reserve (Fed), which is also not
subject to the appropriations process.4
The Fed does not exercise authority over the CFPB or its
budget. The CFPB director is required only to submit a letter to the Federal Reserve Board each
quarter certifying the amount of funds that are “reasonably necessary” for carrying out the
authorities of the Bureau.5

The Federal Reserve then transfers the requested amount. The
CFPB’s funding mechanism differs than that of other financial markets regulators, including the
Federal Trade Commission, the Commodity Futures Trading Commission, or the Securities and
Exchange Commission, as well as the Federal banking agencies. This process affords very little
oversight of the CFPB’s budget.

Legislative Proposals

The bills outlined below will be discussed during hearing:

H.R. ____, the CFPB Dual Mandate and Economic Analysis Act

This bill would establish the Office of Economic Analysis in the CFPB to review all proposed
and existing guidance, orders, rules, and regulations. The bill would require the CFPB to identify
in each proposed rulemaking the problem to be solved by the rule or regulation and the metrics
the CFPB will use to measure the success of the rule or regulation. These metrics must include a
measurement of changes regarding consumer access to, and the cost of, consumer financial
products and services. Additionally, the purpose of the CFPB would be revised to include
strengthening private sector participation in markets, without government interference or
subsidies, to increase competition and enhance consumer choice.

H.R. ____, the Taking Account of Bureaucrats' Spending (TABS) Act

This bill would eliminate provisions that fund the CFPB using transfers from the earnings of the
Federal Reserve System. The transfers under current law permit the CFPB to be funded outside
of the annual appropriations process. This bill brings the CFPB into the regular appropriations
process allowing for greater oversight.
Additionally, this bill would bring the CFPB out from
under the Federal Reserve and make it into an independent agency named the Consumer
Financial Empowerment Agency.

H.R. ____, the CFPB–IG Reform Act
This bill would establish a separate Office of Inspector General for the CFPB. Currently, such
oversight of the CFPB is combined with the Office of Inspector General for the Board of
Governors of the Federal Reserve System.

H.R. ____, the Transparency in CFPB Cost-Benefit Analysis Act

This bill would set forth information required to be included in a rulemaking made by the CFPB.
Specifically, the CFPB must publish a justification of the proposed rulemaking; a quantitative
and qualitative assessment of all anticipated direct and indirect costs and benefits; alternatives to
the proposed rulemaking; impacts on small businesses; and any assumptions, data, or studies
used in preparing this information.

H.R. ____, the CFPB Whistleblower Incentives and Protection Act
This bill would require the CFPB to provide awards to whistleblowers who report information
relating to a violation of consumer financial law resulting in certain monetary sanctions
exceeding $1 million. Specifically, the CFPB would be required to award compensation to
whistleblowers (1) not less than the greater of 10% of the collected monetary sanctions, or
$50,000; and (2) not more than 30% of the collected monetary sanctions. The compensation to
any single whistleblower would be capped at $5 million. The bill would also set forth
requirements regarding the legal representation of a whistleblower and would provide for
confidentiality regarding the whistleblower's identity.

H.R. ____, the Consumer Financial Protection Commission Act
This bill would remove the CFPB from the Federal Reserve System, convert the CFPB into an
independent commission, and modify its leadership structure. Specifically, the bill eliminates the
positions of director and deputy director and establishes a five-person commission appointed by
the President and confirmed by the Senate.

H.R. ____, Encouraging Innovation and Protecting Consumers Act
This bill would revert the CFPB’s Office of Innovation structure and operations to its original
purpose.

H.R. ____, Making the CFPB Accountable to Small Businesses Act
This bill requires the CFPB to consider the impact of all rulemaking efforts on small entities and
to justify its decision to not adopt certain alternatives to regulations applicable to small entities.

H.R. ___, Federal Reserve Loss Transparency Act
This bill amends the Consumer Financial Protection Act of 2010 to prohibit the Fed from
transferring money to fund the CFPB if the Federal Reserve Banks incur an operating loss, and
amends the Federal Reserve Act to require the Fed to follow US GAAP."