Treasury Department To Propose Banking Reform, Wants to ‘Pare Back’ CFPB’s Authority

Because compliance in the ARM industry is not already complicated enough, we have this to add to the pile…

The Treasury Department is considering its own rules to reform the banking industry, on top of what Congress is trying to do with the Financial CHOICE Act and what could happen to the Consumer Financial Protection Bureau based on an Appeals Court case that everyone is anticipating a ruling on any day now.

The consensus is that whatever is proposed by the Treasury Department has a better chance of becoming a reality because Republicans, who are pushing the Financial CHOICE Act, will need the help of Democrats to get the bill through the Senate. No Democrat voted to approve the Financial CHOICE Act when it passed in the House of Representatives last week. The Treasury Department’s proposal is also a “sharp contrast to the slash-and-burn approach” that was approve by the House.

Yet the differences in the two approaches are likely to spark a clash of ideas between an administration stocked with former Wall Street executives and conservative House Republicans, who are calling for more sweeping changes.

The Treasury Department proposal would “sell to pare back the authority of the” CFPB, including removing the power to directly examine banks. But the Treasury Department’s proposal does not go as far as the Financial CHOICE Act, according to the report. The Financial CHOICE Act would remove rulemaking authority from the CFPB and give the president the power to remove the agency’s director for any reason, not just for cause.



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