the wake of the worst U.S. financial crisis since the Great Depression,
Congress passed and the President signed into law sweeping reforms of the
financial services regulatory system through the Dodd-Frank Wall Street
Reform and Consumer Protection Act (Dodd-Frank Act), P.L. 111- 203.
Title X of the Dodd-Frank Act is entitled the Consumer Financial Protection Act
of 2010 (CFP Act). The CFP Act establishes the Bureau of Consumer
Financial Protection (CFPB or Bureau) within the Federal Reserve System
(FRS) with rulemaking, enforcement, and supervisory powers over many
consumer financial products and services, as well as the entities that sell
them. The CFP Act significantly enhances federal consumer protection
regulatory authority over nondepository financial institutions,
potentially subjecting them to analogous supervisory, examination, and
enforcement standards that have been applicable to depository institutions in
the past. The act also transfers to the Bureau much of the consumer
compliance authority over larger depositories that previously had been
held by banking regulators. Additionally, the Bureau acquired the
authority to write rules to implement most federal consumer financial
protection laws that previously was held by a number of other federal
Although the powers that the CFPB has at its disposal are largely the same or
analogous to those that other federal regulators have held for decades,
there is a great deal of uncertainty in how the new agency will exercise
these broad and flexible authorities, especially in light of its almost exclusive
focus on consumer protection. As a result, the CFP Act has proven to be one of
the more controversial portions of the financial reform legislation.
The 112th Congress is actively involved in conducting oversight of the
implementation of the CFP Act. Additionally, the 112th Congress has
considered a number of bills that would significantly alter the structure
of the Bureau. For example, H.R. 2434, the Financial Services and General Government
Appropriations Act, 2012, would make the CFPB’s primary funding subject to the traditional
appropriations process, and H.R. 1315, the Consumer Financial Protection Safety
and Soundness Improvement Act, would convert the CFPB’s leadership
structure from a sole directorship to a commission and would allow the
newly established Financial Stability Oversight Council (FSOC) to overturn
CFPB-issued regulations with a simple majority vote, as opposed to the
current super majority requirement. H.R. 2434 was reported favorably out of the
House Committee on Appropriations, and H.R. 1315 was referred to the
Senate Committee on Banking, Housing, and Urban Affairs after passing the
full House by a vote of 241 to 173. Additionally, 44 Senators signed a
letter to the President expressing support for the Bureau-related objectives of H.R.
2434 and H.R. 1315.
This report provides an overview of the regulatory structure of consumer
finance under existing federal law before the Dodd-Frank Act went into
effect and examines arguments for modifying the regime in order to more
effectively regulate consumer financial markets. It then analyzes how the
CFP Act changes that legal structure, with a focus on the Bureau’s
organization; the entities and activities that fall (and do not fall)
under the Bureau’s supervisory, enforcement, and rulemaking authorities;
the Bureau’s general and specific rulemaking powers and procedures; and the
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny
Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American
Express, or Discover card number, expiration date, and name on the card.
Indicate whether you want e-mail or postal delivery. Phone orders are preferred
and receive priority processing.