GOP bill amending new consumer bureau gets key endorsement

Bachus and Rep. Shelley Moore Capito (R-W.Va.) introduced the legislation earlier this month.

The endorsement from community banks could provide key support for the measure. Lawmakers and regulators have in recent months tried to assuage concerns that the implementation of the Wall Street reform bill, which created the CFPB, will hurt small banks. 

In a speech on March 23, Federal Reserve Chairman Ben Bernanke hailed community banks as integral to the economic recovery and assured they would enjoy a “more level playing field” once Dodd-Frank was in place, arguing the law primarily targets the largest financial institutions.

Bachus said his bill would protect small banks.

“A balanced, bipartisan commission will protect consumers without giving such incredible power to just one unelected person in Washington, as the Dodd-Frank Act does,” Bachus said.

Republicans have criticized the leadership situation at the CFPB, which does not technically begin work until July. 

When presidential assistant and CFPB architect Elizabeth Warren appeared before Bachus’s committee on March 16, she faced fierce criticism from GOP members who argued she was acting as the de facto head of the organization without being nominated or confirmed to the position. 

Warren defended her role, saying she works as an adviser to the president and to the Treasury secretary, not as director of the agency.

When Bachus unveiled his bill on the same day of Warren’s testimony, he warned that the CFPB “might be the most powerful agency ever created.”

This post was updated at 2:15.