Tags: CFPB | Chamber | bills | House

House Financial Services Subcommittee Proposes Reform of CFPB

By    |   Friday, 30 May 2014 07:43 AM

The House Financial Services Committee's Subcommittee on Financial Services and Consumer Credit, chaired by Rep. Shelley Moore Capito, R-W.V., held a hearing May 21 titled "Legislative Proposals to Improve Transparency and Accountability at the CFPB" in order to air some bills, a lot of them, to promote greater transparency and accountability at the Consumer Financial Protection Bureau.

For some time this writer has wondered why this committee has made it a practice to take up legislation in such small bites, instead of pulling the bites together in one bill. One theory was that offering a bunch of cats and dogs gives more prominence to the legislators who author these little bills, making them appear more influential and valuable to constituents, clients and contributors than they really are.

However, a more convincing view appeared in USA Today last week in an opinion piece that included a chart that shows Congress enacting only 103 bills through May 20, and the curve of the chart is that of a nosedive. The cats and dogs strategy probably comes from the leadership, and imagine how low the bill count would be without it.

The article goes on to explain the reasons why Congress appears unable to act in a number of areas that are supposedly high priorities.

In opening statements, Republican members explained their individual proposals, such as Capito's bill to require the CFPB to remit the proceeds of fines to the Treasury rather than use them for what she calls a "slush fund" to administrative costs and financial literacy.

Several Democrats, most notably Rep. Carolyn Maloney, D-N.Y., expressed concern that the Republican bills could cripple the agency. However, the ranking Democrat on the subcommittee, Rep. Greg Meeks, D-N.Y., while stating the same concern, also said he is willing to consider some of the bills.

Andrew Pincus, and outside lawyer representing the powerful U.S. Chamber of Commerce, accused the agency of often conducting its deliberations in closed proceedings and then coming up with "vague standards that provide no guidance for law-abiding companies" and using the enforcement process to define policy without inviting public comment or analyzing the costs and benefits of proposed regulations. However, one of the Chamber's complaints is that the CFPB has failed to establish a "no-action letter process," a complaint that could work against its call for greater transparency in rulemaking.

With examples in each case, the Chamber complains that the CFPB 1) as stated above, conducts deliberations without sufficient public comment, 2) does not respect statutory limits on its jurisdiction and authority, and 3) abuses citizens' rights in collection of private data. Not surprisingly, the Chamber endorses the subcommittee's legislative agenda, which reads like it might have been drafted by the Chamber.

In rebuttal, Ed Mierzwinski, consumer program director of the United States Public Interest Research Group, contended that there is no need for any of the proposed bills, and ironically, he warned that they could impose an undue compliance burden and litigation risk for the agency.

Proponents of the CFPB see it as a "work in progress" and don't want to go back to the lax and disjointed regulatory regime that prevailed before Dodd-Frank.

(Archived video, the committee memorandum and proposed bills can be found here.)

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The House Financial Services Committee's Subcommittee on Financial Services and Consumer Credit held a hearing in order to air some bills to promote greater transparency and accountability at the Consumer Financial Protection Bureau.
CFPB, Chamber, bills, House
Friday, 30 May 2014 07:43 AM
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