The House Financial Services Committee is considering a bill that would modify the Dodd-Frank Act by replacing the Bureau of Consumer Financial Protection's director with a five-person commission, at a hearing today.

The Bureau, newly created under Dodd-Frank, is housed within the Federal Reserve System and is charged with ensuring that banks are transparent enough that consumers understand the offered products and services.

Yesterday, the American Bankers Association threw its weight behind the new bill. “We believe that the commission approach would broaden the perspective on any rulemaking and enforcement activity of the Bureau, and it would provide needed balance and appropriate checks in the exercise of the Bureau's authority,” the group said in a letter sent to the House Financial Services Committee yesterday. "The commission also would facilitate continuity of the organization and enhance predictability about rulemaking over time."

In addition, the bankers' group asked the Financial Institutions and Consumer Credit Subcommittee, which is reviewing the legislation, to include in the bill a requirement for one person on the Commission to have consumer finance business experience and for another to be the person who will also occupy the newly-created position of Vice Chairman for Supervision of the Federal Reserve Board.

The House's Chairman Spencer Bachus introduced the bill, known as the Responsible Consumer Financial Protection Regulations Act, on March 16. , “It always seemed clear to me that the Dodd-Frank Act put too much power in the hands of one person,” said Bachus, a Republican, in a statement when he announced the legislation. “Empanelling a five-member commission is an important first step in ending predatory financial practices without inappropriately limiting access to credit that small businesses and individuals want and need. We can achieve consumer protection without a credit czar.”

Bachus' bill would require the five Commission members to be appointed by the President and approved by Senate. They would serve staggered terms, hold no other post, and no more than three of them could be from the same political party.

At today's hearing, the House Subcommittee is also considering Republican Congressman Sean Duffy's Consumer Financial Protection Safety and Soundness Improvement Act, which would modify Dodd-Frank's voting standard for the Financial Stability Oversight Council to a majority vote, rather than requiring a full two-thirds majority. The banking group supports this measure, as well, according to the letter.

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