Republicans aim to weaken consumer bureau

WASHINGTON (CNNMoney) -- House Republicans on Wednesday detailed a new barrage of legislative measures they plan to pursue that would dilute, delay and curtail powers of the new Consumer Financial Protection Bureau (CFPB).

"This is just the beginning of what will be an ongoing dialogue of how to better reform the CFPB," said Rep. Shelley Moore Capito, a West Virginia Republican during a hearing on Wednesday. "The current structure simply puts too much power in the hands of one individual and does not allow for sufficient oversight of the regulations put forth by the bureau."

The new consumer bureau was the most popular part of the Wall Street reforms passed into law last year. But it was also the most politically controversial, barely emerging after more than a year's worth of legislative wrangling.

The bureau is an independent agency, funded by fees that banks pay to the Federal Reserve. Beginning on July 21, it will be charged with regulating credit cards, mortgages and other financial products like payday loans.

Elizabeth Warren is currently working as the Obama administration's point person to set up the bureau and get it ready for its launch this summer. The White House has yet to nominate a director to run the bureau, who would be confirmed by the Senate. Warren is reportedly in the running.

Among the latest legislative efforts, Republicans say they want to:

* Replace the job of director of the bureau with a five-member committee.

* Make it easier to overturn and veto consumer bureau rules.

* Prevent the bureau from flexing any new powers until the Senate confirms a director.

* Stop consumer bureau financial examiners from going on ride-along banking examinations with other regulatory agencies until the bureau is up and running.

Warren, a consumer advocate and Harvard University professor working as an adviser to both the White House and Treasury, has defended the bureau against efforts to chip away at its powers and independence before it's up and running.

"Any attempt to delay or undermine the CFPB could leave American families and the economy exposed to many of the same risks that brought our financial system to the brink of collapse," said Jennifer Howard, bureau spokesman.

House Financial Services chairman Spencer Bachus said the new legislative moves aren't about watering down consumer protections or advancing politics. He said Republicans aren't out to attack Warren.

"This is not about Elizabeth Warren, it's about giving one person total, unbridled authority," said Bachus, an Alabama Republican.

During the hearing, nearly all the banks and banking groups invited to testify, including those representing small banks and credit unions, said they support Republican efforts to whittle the consumer bureau's powers.

"The current veto authority (to overturn consumer bureau rules) doesn't go far enough," said Lynette Smith, president of the Washington Gas Light Federal Credit Union, speaking on behalf of the National Association of Federal Credit Unions. She said they'd support efforts to make it easier to veto consumer bureau rules.