Single Consumer Director? Depends on Which Agency You Mean

Photograph by Andrew Harrer/Bloomberg

Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), testifies during a Senate Banking Committee hearing in Washington.

Almost from the moment that the Consumer Financial Protection Bureau was created in 2010, Republican and Democratic lawmakers began fighting over whether the agency should be run by a commission or a director.

Democrats are content with the single-director structure set up by the Dodd-Frank financial regulatory law, saying it helps the agency operate efficiently and leaves no question about who’s in charge. Republicans say the model invests too much regulatory power in one person. They want a five-member commission instead.

Now if you’re looking for ideological consistency in Washington, please avert your eyes.

Over at the Consumer Product Safety Commission, one current and one former Republican commissioner say they want to dismantle that agency’s commission in favor of a single director. Meantime, the former Democratic chairman of the panel says the commission model worked just fine.

The two consumer agencies have similar mandates. The product safety commission is a watchdog over goods including appliances, baby cribs and toys. The consumer finance bureau sets rules for credit cards, mortgages and other products and protects borrowers from unscrupulous lenders or debt collectors.

Anne Northup, a Republican who was a product safety commissioner from 2009 to 2012, said in an interview that a single director clarifies accountability. “If the president chooses a director who ruins the market, it’s on his shoulders, and if he does not, he’ll get the credit,” Northup said.

On the other side, Ann Brown, a Democrat who headed the product safety commission during the Clinton administration, said the multi-member structure brings a wider range of views and forces people to “work together to make decisions.”

Nancy Nord, a Republican serving on the product safety commission, said the benefits of the collegial model that Brown describes are overrated.

Unless the subject is “mundane,” the group splits along party lines, Nord said. And she contends that the legal requirement that commissioners conduct much of their debates in front of the public limits the informal exchanges that can improve decision-making.

None of the three is saying that their opinions about the product safety commission necessarily apply to the consumer finance bureau.

Last year, House Republicans pushed through a bill to replace the consumer finance bureau’s director with a commission. The legislation got nowhere in the Democrat-controlled Senate. The product-safety agency didn’t come up in that debate, but it may well do so if the bill is revived.

What do you think about this article? Comment below!