S. 3196 – Consumer Financial Protection Board Act of 2016

114th CONGRESS

2d Session

S. 3196

IN THE SENATE OF THE UNITED STATES

July 13, 2016

Mrs. Fischer (for herself, Mr. Barrasso, Mr. Flake, and Mr. Johnson) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To amend the Consumer Financial Protection Act of 2010 to transition the Bureau of Consumer Financial Protection to a 5-member board of directors.

Short title

This Act may be cited as the Consumer Financial Protection Board Act of 2016.

Management of the Bureau

(a)

In general

Section 1011 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5491) is amended—

(1)

by striking subsections (b), (c), and (d);

(2)

by redesignating subsection (e) as subsection (c); and

(3)

by inserting after subsection (a) the following:

(b)

Management of the Bureau

(1)

In general

The management of the Bureau shall be vested in a Board of Directors consisting of 5 members, who shall be appointed by the President, by and with the advice and consent of the Senate, from among individuals who—

(A)

are citizens of the United States; and

(B)

have developed strong competency and understanding of, and have experience working with, financial products and services.

(2)

Terms

(A)

In general

Except as provided in subparagraph (B), each member of the Board, including the Chairperson, shall serve for a term of 5 years.

(B)

Staggered terms

Three of the initial members of the Board, including the Chairperson, shall each serve an initial term of 30 months.

(C)

Removal

The President may remove any member of the Board for inefficiency, neglect of duty, or malfeasance in office.

(D)

Vacancies

Any member of the Board appointed to fill a vacancy occurring before the expiration of the term to which the predecessor of that member was appointed (including the Chairperson) shall be appointed only for the remainder of the term.

(E)

Continuation of service

Each member of the Board may continue to serve after the expiration of the term of office to which that member was appointed until a successor has been appointed by the President and confirmed by the Senate, except that a member may not continue to serve more than 1 year after the date on which the term of that member would otherwise expire.

(F)

Successive terms

A member of the Board may not be reappointed to a second consecutive term, except that an initial member of the Board appointed for less than a 5-year term may be reappointed to a full 5-year term and a future member appointed to fill an unexpired term may be reappointed for a full 5-year term.

(3)

Affiliation

Not more than 3 members of the Board, and not more than 2 members of the Board described in paragraph (2)(B), shall be members of any 1 political party.

(4)

Chairperson of the Board

(A)

Appointment

The President shall appoint 1 of the 5 members of the Board to serve as Chairperson of the Board.

(B)

Authority

The Chairperson shall be the principal executive officer of the Bureau, and shall exercise all of the executive and administrative functions of the Bureau, including with respect to—

(i)

the supervision of personnel employed by the Bureau (other than personnel employed regularly and full time in the immediate offices of members of the Board other than the Chairperson);

(ii)

the distribution of business among personnel appointed and supervised by the Chairperson and among administrative units of the Bureau; and

(iii)

the use and expenditure of funds.

(C)

Limitation

In carrying out any of the functions of the Chairperson under this paragraph, the Chairperson shall be governed by general policies of the Bureau and by such regulatory decisions, findings, and determinations as the Bureau may by law be authorized to make.

(D)

Requests or estimates related to appropriations

Any request or estimate for regular, supplemental, or deficiency appropriations on behalf of the Bureau, including any request for a transfer of funds under section 1017(a), may not be submitted by the Chairperson without the prior approval of the Board.

(E)

Vacancy

The President may designate a member of the Board to serve as Acting Chairperson in the event of a vacancy in the office of the Chairperson.

(5)

Compensation

(A)

Chairperson

The Chairperson shall receive compensation at the rate prescribed for level I of the Executive Schedule under section 5312 of title 5, United States Code.

(B)

Other members of the Board

The 4 members of the Board other than the Chairperson shall each receive compensation at the rate prescribed for level II of the Executive Schedule under section 5313 of title 5, United States Code.

(6)

Other employment prohibited

A member of the Board may not engage in any other business, vocation, or employment.

(b)

Technical and conforming amendments

(1)

Consumer Financial Protection Act of 2010

The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et seq.) is amended—

(A)

in section 1002 (12 U.S.C. 5481)—

(i)

by striking paragraph (10) and inserting the following:

(10)

Board

The term Board means the Board of Directors of the Bureau of Consumer Financial Protection.

; and

(ii)

by inserting after paragraph (29) the following:

(30)

Chairperson

The term Chairperson means the Chairperson of the Board of Directors of the Bureau of Consumer Financial Protection.

;

(B)

in section 1012 (12 U.S.C. 5492)—

(i)

in subsection (a)(8), by striking appointed and supervised by the Director and inserting appointed by the Board and supervised by the Chairperson;

(ii)

in subsection (b), by striking Director and inserting Board; and

(iii)

in subsection (c)—

(I)

in paragraph (2)(A), by striking Director and inserting Board; and

(II)

in paragraph (4), by striking the Director each place that term appears and inserting any member of the Board;

(C)

in section 1013 (12 U.S.C. 5493)—

(i)

in subsections (a), (b), (d), and (e), by striking Director each place that term appears and inserting Board;

(ii)

in subsection (a), by adding at the end the following:

(6)

Limitation

(A)

In general

Except as provided in subparagraph (B), the Board shall appoint not more than 1 employee of the Bureau for every 3 employees that are separated from service with the Bureau.

(B)

Exception

The President may provide the Board with an exemption from the requirements of subparagraph (A) if the Board demonstrates that hiring employees in an amount greater than the limitation in subparagraph (A) is necessary—

(i)

as a result of a national security concern or an extraordinary emergency; or

(ii)

to perform a critical mission.

;

(iii)

in subsection (c)—

(I)

in paragraphs (1) and (2), by striking Director each place that term appears and inserting Board; and

(II)

in paragraph (3)—

(aa)

by striking Assistant Director each place that term appears and inserting Head of Office; and

(bb)

by striking the Director each place that term appears and inserting the Board; and

(iv)

in subsection (g)—

(I)

in paragraph (1), by striking Director and inserting Board; and

(II)

in paragraph (2)—

(aa)

in the paragraph heading, by striking Assistant director and inserting Head of the office; and

(bb)

by striking an assistant director and inserting the Head of the Office of Financial Protection for Older Americans;

(D)

in section 1014 (12 U.S.C. 5494), by striking Director each place that term appears and inserting Board;

(E)

in section 1016(a) (12 U.S.C. 5496(a)), by striking Director of the Bureau and inserting Chairperson;

(F)

in section 1017—

(i)

in subsection (a)—

(I)

in paragraph (1), by striking Director and inserting Board;

(II)

in paragraph (4)—

(aa)

in subparagraph (A)—

(AA)

by striking Director shall and inserting Board shall;

(BB)

by striking Director, and inserting Board,; and

(CC)

by striking Director in each place that term appears and inserting Board in;

(bb)

in subparagraph (D), by striking Director and inserting Board; and

(cc)

in subparagraph (E), by striking Director to and inserting Board to; and

(III)

in paragraph (5)(C), by striking Director of the Bureau and inserting Chairperson;

(ii)

in subsection (c)(1)—

(I)

by striking Director, and inserting Board,; and

(II)

by striking Director and and inserting the members of the Board and; and

(iii)

in subsection (e), by striking Director each place that term appears and inserting Board;

(G)

in subtitles B (12 U.S.C. 5511 et seq.), C (12 U.S.C. 5531 et seq.), and G (12 U.S.C. 5601 et seq.), by striking Director each place that term appears and inserting Board;

(H)

in section 1061(c)(2)(C)(i) (12 U.S.C. 5581(c)(2)(C)(i)), by striking the Board and inserting the National Credit Union Administration Board; and

(I)

in section 1066(a) (12 U.S.C. 5586(a)), by inserting first before Director.

(2)

Financial Stability Act of 2010

Section 111(b)(1)(D) of the Financial Stability Act of 2010 (12 U.S.C. 5321(b)(1)(D)) is amended by striking Director of the Bureau and inserting Chairperson of the Board of Directors of the Bureau.

(3)

Mortgage Reform and Anti-Predatory Lending Act

Section 1447 of the Mortgage Reform and Anti-Predatory Lending Act (12 U.S.C. 1701p–2) is amended by striking Director each place the term appears and inserting Board of Directors.

(4)

Electronic Fund Transfer Act

Section 920(a)(4)(C) of the Electronic Fund Transfer Act (15 U.S.C. 1693o–2(a)(4)(C)) is amended by striking Director of the Bureau and inserting Board of Directors of the Bureau.

(5)

Expedited Funds Availability Act

The Expedited Funds Availability Act (12 U.S.C. 4001 et seq.) is amended by striking Director of the Bureau each place that term appears and inserting Board of Directors of the Bureau.

(6)

Federal Deposit Insurance Act

Section 2 of the Federal Deposit Insurance Act (12 U.S.C. 1812) is amended—

(A)

by striking Director of the Consumer Financial Protection Bureau each place that term appears and inserting Chairperson of the Board of Directors of the Bureau of Consumer Financial Protection; and

(B)

in subsection (d)(2), by striking Comptroller or Director and inserting Comptroller or Chairperson.

(7)

Federal Financial Institutions Examination Council Act of 1978

Section 1004(a)(4) of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3303(a)(4)) is amended by striking Director of the Consumer Financial Protection Bureau and inserting Chairperson of the Board of Directors of the Bureau of Consumer Financial Protection.

(8)

Financial Literacy and Education Improvement Act

Section 513 of the Financial Literacy and Education Improvement Act (20 U.S.C. 9702) is amended by striking Director each place that term appears and inserting Chairperson of the Board of Directors.

(9)

Home Mortgage Disclosure Act of 1975

Section 307 of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2806) is amended by striking Director of the Bureau of Consumer each place that term appears and inserting Board of Directors of the Bureau of Consumer.

(10)

Interstate Land Sales Full Disclosure Act

The Interstate Land Sales Full Disclosure Act (15 U.S.C. 1701 et seq.) is amended—

(A)

in section 1402(1) (15 U.S.C. 1701(1)), by striking Director means the Director and inserting Board means the Board of Directors;

(B)

by striking Director each place that term appears and inserting Board;

(C)

in section 1403(c) (15 U.S.C. 1702(c))—

(i)

by striking by him and inserting by the Board; and

(ii)

by striking he and inserting the Board;

(D)

in section 1407 (15 U.S.C. 1706)—

(i)

in subsection (c), by striking he and inserting the Board; and

(ii)

in subsection (e), by striking him and inserting the Board;

(E)

in section 1411 (15 U.S.C. 1710)—

(i)

in subsection (a)—

(I)

by striking his findings and inserting its finding; and

(II)

by striking his recommendation and inserting a recommendation; and

(ii)

in subsection (b), by striking Secretary’s order and inserting order of the Board;

(F)

in section 1415 (15 U.S.C. 1714)—

(i)

by striking him each place that term appears and inserting the Board;

(ii)

in subsection (a), by striking he may, in his discretion and inserting the Board may, at the discretion of the Board; and

(iii)

in subsection (b)—

(I)

by striking he each time that term appears and inserting the Board; and

(II)

by striking in his discretion each time that term appears and inserting at the discretion of the Board;

(G)

in section 1416(a) (15 U.S.C. 1715(a))—

(i)

by striking of the Bureau of Consumer Financial Protection the first time that term appears;

(ii)

by striking his functions, duties, and powers and inserting the functions, duties, and powers of the Board;

(iii)

by striking his administrative law judges and inserting the administrative law judges of the Bureau of Consumer Financial Protection; and

(iv)

by striking himself and inserting the Board;

(H)

in section 1418a (15 U.S.C. 1717a)—

(i)

in subsection (b)(4), by striking The Secretary’s determination or order and inserting A determination or order of the Board; and

(ii)

in subsection (d), in the third sentence, by striking the Secretary’s determination or order and inserting a determination or order of the Board;

(I)

in section 1419 (15 U.S.C. 1718)—

(i)

by striking him and inserting the Board;

(ii)

by striking his rules and regulations and inserting the rules and regulations of the Board; and

(iii)

by striking his jurisdiction and inserting the jurisdiction of the Bureau of Consumer Financial Protection; and

(J)

in section 1420 (15 U.S.C. 1719)—

(i)

by inserting or any member of the Board before in any proceeding; and

(ii)

by striking him and inserting the Board or any member of the Board.

(11)

Real Estate Settlement Procedures Act of 1974

Section 5 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604) is amended—

(A)

by striking Director of and inserting Board of Directors of; and

(B)

by striking Director each place that term appears and inserting Board.

(12)

S.A.F.E. Mortgage Licensing Act of 2008

The S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.) is amended—

(A)

in section 1503(10) (12 U.S.C. 5102(10))—

(i)

in the paragraph heading, by striking Director and inserting Board; and

(ii)

by striking Director means the Director and inserting Board means the Board of Directors;

(B)

by striking Director each place that term appears and inserting Board; and

(C)

in section 1514 (12 U.S.C. 5113)—

(i)

in subsection (b)(5), by striking Secretary’s expenses and inserting expenses of the Board;

(ii)

in subsection (c)—

(I)

in paragraph (1), in the paragraph heading, by striking Director and inserting Board;

(II)

in paragraph (4)—

(aa)

in subparagraph (A), in the paragraph heading, by striking Director and inserting Board; and

(bb)

in subparagraph (C), by striking Secretary’s expenses and inserting expenses of the Board; and

(III)

in paragraph (5), in the paragraph heading, by striking Director and inserting Board; and

(iii)

in subsection (d), in the subsection heading, by striking Director and inserting Board.

(13)

Title 44

Section 3513(c) of title 44, United States Code, is amended by striking Director of the Bureau and inserting Board of Directors of the Bureau.

(14)

Deeming of Name

Any reference in a law, regulation, document, paper, or other record of the United States to the Director of the Bureau of Consumer Financial Protection shall be deemed a reference to the Board of Directors of the Bureau of Consumer Financial Protection, unless otherwise specified in this Act.

(c)

Effective date

The amendments made by this section shall take effect on the date on which not less than 3 persons have been confirmed by the Senate to serve as members of the Board of Directors of the Bureau of Consumer Financial Protection.

Consumer Financial Protection Board Act of 2016

Legislative Activity

Bill Text