Hillary Clinton is jumping into the long-running fight over the Consumer Financial Protection Bureau (CFPB), urging House Democrats to fight back against GOP legislation that would overhaul it.
In a letter to House Democrats, Clinton urged opposition to legislation that would alter how the CFPB is run, and allow Congress to set its budget. Clinton argued that the agency has proven itself to be effective, and the attempts to tweak it are really efforts to subvert it.
{mosads}“Republicans remain determined to weaken or even destroy the agency. They’ve tried to strip it of its independence and cut its funding,” she wrote. “They want to make the CFPB more vulnerable to special interest lobbies and less effective in defending working families.”
Clinton also urged Democrats to reject any attempts by Republicans to insert financial regulatory changes into must-pass legislation coming up this fall, such as an increase to the debt ceiling or funding legislation to avert a government shutdown.
The populist message from Clinton comes one day after the Democratic presidential candidate said she would soon be unveiling her plan for addressing abuses on Wall Street. Her full-throated support for the CFPB marks Clinton’s latest effort to try to shake off the perception that she is friendlier to the finance sector than her Democratic challengers.
The CFPB is viewed among Wall Street critics as a major victory of the Dodd-Frank financial reform law, and the agency has some high-profile backers. After all, the idea for the agency was first cooked up by Sen. Elizabeth Warren (D-Mass.), who worked under Obama to help establish it before running for office herself.
The bill at the center of Clinton’s ire is legislation offered by Rep. Randy Neugebauer (R-Texas) that passed the House Financial Services Committee at the end of September with mostly GOP support.
The legislation faces clear passage, given the GOP majority in the House. But like other attempts to roll back or alter pieces of the Dodd-Frank Act, it faces longer odds in the Senate where some Democrats will need to back it to pass it.
Ever since the CFPB was created as part of Dodd-Frank in 2010, there has been a partisan feud over its operations. Republicans have tried multiple times to bring the agency’s budget under the control of congressional appropriators (it currently receives an independent funding stream through the Federal Reserve), and replace its single director with a bipartisan commission. The GOP argument has been the same throughout: The CFPB is an unaccountable agency with too much power and too little oversight. They also point out that other financial regulators are run via a commission structure, and some have their budgets set by Congress.
But throughout it all, the Democratic rebuttal has been just as static. Democrats have almost universally dismissed the GOP efforts as an attempt to weaken an effective regulator. Clinton’s salvo falls squarely in that camp.
“If this bill passes, consumers’ primary advocate in the U.S. government would have to fight with one hand tied behind its back. Perhaps that’s exactly what Republicans and their corporate allies want,” she wrote.
Some Democrats have expressed openness to revisiting the CFPB’s structure, but there appears to be little appetite among Senate Democrats to send the bill along to the president.
In addition, President Obama has been fairly steady in promising to veto bills making significant changes to Dodd-Frank, and would likely veto the bill if presented with it.