On January 11, 2017, U.S. Senator Deb Fischer (R-Neb.) introduced Senate Bill 105 which proposes a substantial change to the leadership structure of the Consumer Financial Protection Bureau (“CFPB”). Senator Fischer was joined by Republican Senators Ron Johnson (R-Wisc.) and John Barrasso (R-Wyo.) in introducing the bill – which has since added Senator Jeff Flake (R-Ariz.) as a co-sponsor.

Senate Bill 105 is titled “Consumer Financial Protection Board Act of 2017” and would make the following changes to the CFPB’s leadership structure:

• The current single-director structure would be replaced by a five-member board.

• The board members would be appointed by the President and confirmed by the Senate.

• One board member would be appointed by the President to serve as the chairperson.

• No more than three members of the board would be permitted from any one political party.

• The terms of the members would be staggered, with three of the five initial members to serve 30-month terms, and the remaining two members would serve five-year terms. Subsequent members would all serve five-year terms.

• A member may not be reappointed to serve a consecutive term, with the exception of members who had been appointed for less than a five-year term.

• To be appointed, board members must have demonstrated strong “competency and understanding of, and have experience working with, financial products and services.”

• Board members may be removed by the President for “inefficiency, neglect of duty, or malfeasance in office.”

The introduction of Senate Bill 105 comes on the heels of the October 11, 2016 ruling by the D.C. Circuit in PHH Corp. v. CFPB, No. 15-1177 (D.C. Cir. Oct 11, 2016) that the CFPB’s single-director leadership structure is unconstitutional. The CFPB petitioned the D.C. Circuit for en banc review of the panel’s decision. The petition is still pending. There is speculation, however, that President Trump intends to abandon the CFPB’s legal defense of its current CFPB structure. Senate Bill 105 has been referred to the Senate Committee on Banking, Housing, and Urban Affairs.