Ed's Blog

Delayed CFPB/Other Wall Street Reform Rollbacks Happening Today On House Floor

By Ed Mierzwinski
Senior Director, Federal Consumer Program

Last month the House canceled floor consideration of the Financial Services and General Government Appropriations bill. FSGG Approps is back on the floor today and tomorrow. We urge support of amendments to protect the Consumer Financial Protection Bureau (CFPB) but, since they won't pass, we urge a no vote on the bill. Here's an updated excerpt from my previous blog (June 22).

In the main ring, we have HR 5485, the Financial Services and General Government Appropriations (FSGG) Bill. We urge opposition to the bill, which does not adequately fund government agencies. However, worse than that, as passed by committee, it includes numerous dubious, dangerous policy riders. For example, it would make the Consumer Financial Protection Bureau (CFPB) our only banking regulator without independent funding, even though others have had it since 1864 to protect the agencies -- and our financial system and economy -- from political interference. That's right, since 1864 (yes, the long-ago 1864, during the U.S. Civil War), it has been national policy not to risk our financial safety net and economy to the highly politicized, porkbarrel-driven, influence-peddling-special-interest-lobbyist-dominated gauntlet known as the "appropriations process." Yes, some in Congress would make CFPB the only one of four bank regulators subject to this system. The banks and payday lenders certainly want a return to those reckless pre-2008 days, when pliant regulators coddled them and they could run amok. But that's no reason to do it while there's every reason not to do so.

A separate rider would eliminate the bureau's single-director structure and replace it with a commission which could be dominated by industry-backed appointees. A variety of other riders would further delay important CFPB efforts (1) to regulate high-cost predatory payday and auto title lending and (2) to eliminate the insertion of onerous bans on joining class actions into arbitration clauses included in financial product contracts.

Other already-included riders would strike at the safety-and-soundness reforms of the Dodd-Frank Wall Street Reform and Consumer Protection Act, including to gut the powers of its Financial Stability Oversight Board (FSOC) designed to coordinate the efforts of regulators to prevent another spectacular, but now-preventable, collapse as we had in 2008. The bill would also weaken the authority of the Securities and Exchange Commission (SEC) to protect investors.

We support amendments to ameliorate these provisions, such as #48, #49, and #50, to strike the anti-CFPB riders, but urge a no vote on final passage even if the positive amendments prevail. Of course we also oppose further weakening amendments. Here is the White House Statement of Administration Policy opposing the bill. 

We concur with the detailed provisions of this letter from the PIRG-backed Americans for Financial Reform. Excerpt from AFR letter:

"At the end of last year, Congress rejected multiple efforts to use the budget process to force through unrelated ideological riders, including changes in financial regulation that would undermine consumer protections, endanger financial security, or reduce accountability for large financial institutions. Again this year, a broad coalition of 255 organizations has weighed in to oppose riders in appropriations bills that would undermine financial reform. Unfortunately, the Appropriations Committee draft of the Financial Services and General Government Appropriations Act is nevertheless loaded with ideological policy riders, and numerous additional such riders aimed at weakening Wall Street oversight and consumer protection have been offered as amendments."

Since we wrote that 6/22 blog entry, what has the CFPB done to help you? Here are a few excerpts from its newsroom, covering its work in educating consumers, supervising companies to ensure that they follow the laws, and enforcing the laws. Take a look.

The idea of the CFPB needs no defense, only more defenders. Please tell your Representative and Senators to defend the CFPB.

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