CBA Renews Support for Legislative Proposals to Provide Meaningful Reform at the CFPB

The House Financial Services Committee today will vote on several legislative proposals that would deliver meaningful and long overdue reforms to the Consumer Financial Protection Bureau (CFPB). In a new letter sent to the Committee ahead of the markup, the Consumer Bankers Association (CBA) renewed support for legislation necessary to ensure the Bureau fulfills its responsibility of protecting consumers and supporting a competitive financial services marketplace, stating: 

“Significant reforms to the CFPB are long overdue. Since its inception, the Bureau has been a political lightning rod, instead of a steady and consistent voice for consumer protection regulation and best practices expected from a world class regulator. […] CBA stands ready to work with Congress to create a CFPB that is transparent, well run, and is equipped to fulfill its mission over the long term, so banks can continue to provide safe and innovative products to their customers.”

America’s leading banks fully believe in the need for a responsible regulator to deliver the highest levels of protections for the millions of consumers we’re all working to serve. In the letter, CBA goes on to highlight how several pieces of legislation being considered would empower the agency to operate with greater consistency, clarity, transparency and oversight for years to come, including:

Bipartisan CFPB Commission

• CBA supports the Consumer Financial Protection Commission Act, sponsored by Rep. Blaine Luetkemeyer. Consistent and durable consumer protection is created by ensuring stability between administrations and is based on transparency between regulatory agencies and the industries they regulate.

CFPB Funding Mechanism

• CBA supports the TABS Act, sponsored by Rep. Andy Barr, which would subject the CFPB to the annual Congressional appropriations process. Doing so would not only compel the Bureau to begin taking oversight seriously– it would also provide Congress with ongoing opportunities to review and adjust the CFPB’s budget as needed so that it can appropriately regulate the products and services offered to consumers by financial service providers.

Cost-Benefit Analysis

• CBA supports the Transparency in CFPB Cost-Benefit Analysis Act, sponsored by Rep. Alex Mooney, which would require the CFPB to conduct a rigorous cost-benefit analysis as a part of the rulemaking process, ensuring the benefits of policy changes outweigh the costs to consumers. Current law leaves the details of a cost-benefit analysis to the CFPB’s “discretion, often resulting in lopsided rules that may sound positive in concept but have damaging consequences.”

Independent Inspector General

• CBA supports the CFPB-IG Reform Act, sponsored by Rep. Blaine Luetkemeyer. Establishing an independent Inspector General (IG), separate from the existing IG at the Federal Reserve, which “would bring more accountability to the Bureau and provide Congress with important information on its internal operations. An independent Inspector General that is solely dedicated to the CFPB full time is particularly important in light of the recent major CFPB data breach.

To read the full letter, click HERE.

UDAAP Authority 

• While not included in today’s markup, CBA continues to urge policymakers in Congress to address the CFPB’s misuse of its “Unfair, Deceptive, or Abusive Acts or Practices” (UDAAP) authority, specifically changes made by the Bureau last year to the UDAAP Exam Manual. As CBA President and CEO Lindsey Johnson conveyed in a recent American Banker op-ed, these actions not only raise profound substantive and procedural legal concerns, they have also created significant uncertainty throughout the financial services marketplace to the detriment of consumers and banks alike. 

Background

• Ahead of a House Financial Services Subcommittee on Financial Institutions and Monetary Policy hearing last month entitled “Consumer Financial Protection Bureau: Ripe for Reform,” CBA outlined similar recommendations to reform the Consumer Financial Protection Bureau (CFPB). To learn more, click HERE. 
• To read Johnson’s RealClearMarkets op-ed, “Congress Should Get Head Start On CFPB Oversight and Reform,” click HERE.