Thank you for contacting me in regard to Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Consumer Financial Protection Bureau (CFPB). I appreciate the opportunity to address this important issue.
In response to the financial crisis of 2008, President Obama and a Democratic-led Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173). This act placed a variety of new regulations on the American financial system in response to its near collapse in 2008. Dodd-Frank was signed into law on July 21, 2010, and imposes overreaching and stringent regulations on our financial markets.
I support consumer protection although I do not believe the current structure of the CFPB would solve the problems that led to the 2008 financial crisis. The CFPB is nothing more than a massive government bureaucracy that exists within the Federal Reserve with the authority to micromanage credit decisions. CFBP's authority is set within the Federal Reserve's budget and lacks accountability. With little Congressional oversight and an ambiguous scope of authority, the CFPB has the potential to inhibit the growth of American businesses through regulation and bureaucracy. The organization's current structure also gives too much power to the director, who would ultimately answer to no one, further weakening the entity's accountability.
In 2011, I joined with 44 of my colleagues and sent a letter to President Obama detailing why we could not support the structure of the CFPB. The letter called for three common sense reforms: establish a board of directors to oversee the CFPB instead of a sole director, include the CFPB in our appropriations process which would subject it to Congressional oversight, and establish a safety-and-soundness check for the CFPB's regulators. Implementing these reforms would help alleviate our concerns regarding the current structure of the CFPB.
Unfortunately, President Obama has not taken action to do so. For these reasons, I voted against the nomination of Richard Cordray to be the first director of the Consumer Financial Protection Bureau in December 2011. I am disappointed the President decided to appoint Mr. Cordray through a recess appointment in January 2012, granting him power without approval of the Senate or the adoption of any needed reforms. However, in January 2012, a federal appeals court ruled similar recess appointments to the National Labor Relations Board unconstitutional, placing Mr. Cordray's controversial recess appointment in question. However, as you may know, on June 16, 2013, the Senate voted to confirm Mr. Cordray as director of the CFPB for a five year term. Again, I voted against his confirmation to lead the bureau.
The real solution to our country's financial problems is enhancing private sector competition, not enacting burdensome regulations passed down from a massive bureaucracy with no accountability. A competitive and sound financial system will lead to long term economic growth and success. Please rest assured that I will keep your thoughts in mind if further legislation to reform our financial system comes before me in the Senate. It is an honor to serve you and the people of Florida.
United States Senator
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