Sen. Minority Leader Mitch McConnell, R-Ky., said in an accompanying statement that "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. Today's letter delivers a commitment by 44 Republican senators to fix the poorly thought structure of this agency that will have unprecedented reach and control over individual consumer decisions -- but an unprecedented lack of oversight and accountability."
Republicans have long opposed Obama's choice of Harvard law professor Elizabeth Warren, whom they regard as too aggressive, as bureau director. She has been overseeing the agency created in July 2010 on a temporary basis.
Rather than a director, the Republicans favor an advisory board, saying that would prevent a single person from dominating the bureau and "provide a critical check on the bureau's authority." They also would subject the bureau to the congressional appropriations process. "This would provide oversight and accountability to the American people on how public money is spent," the letter said. Finally, the Republicans would establish a "safety-and-soundness check for regulators who oversee financial institutions" to "help ensure that excessive regulations do not needlessly cause bank failures."
The White House, according to news reports, continues to defend the existing arrangement that places the independent bureau within the Federal Reserve, saying it would provide the "strongest consumer protections in history."
The president has until July 21 to get a director seated in the job, and has the option, given the capacity of 44 senators to filibuster a nomination, to rely on a recess appointment.
Travis Plunkett, legislative director of the Consumer Federation of America, called the letter "astonishing" for insisting that "both Houses of Congress and the president agree to far-reaching changes to the bureau's structure and funding before the agency ever opens its doors.
"The measures that these senators are demanding were all considered and rejected by Congress last year," he said, "because they would give big banks extraordinary power over the bureau's operations and handcuff the only consumer financial cop on the beat that Americans have ever had."