[Congressional Record Volume 160, Number 33 (Thursday, February 27, 2014)]
[House]
[Pages H2028-H2043]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONSUMER FINANCIAL PROTECTION SAFETY AND SOUNDNESS IMPROVEMENT ACT OF
2013
General Leave
Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days within which to revise and extend their remarks
and submit extraneous material on H.R. 3193, the Consumer Financial
Protection Safety and Soundness Improvement Act of 2013.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
The SPEAKER pro tempore. Pursuant to House Resolution 475 and rule
XVIII, the Chair declares the House in the Committee of the Whole House
on the state of the Union for the consideration of the bill, H.R. 3193.
The Chair appoints the gentleman from Wisconsin (Mr. Ribble) to
preside over the Committee of the Whole.
{time} 1441
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole House on the state of the Union for the consideration of the bill
(H.R. 3193) to amend the Consumer Financial Protection Act of 2010 to
strengthen the review authority of the Financial Stability Oversight
Council of regulations issued by the Bureau of Consumer Financial
Protection, and for other purposes, with Mr. Ribble in the chair.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to the rule, the bill is considered
read the first time.
The gentleman from Texas (Mr. Hensarling) and the gentlewoman from
California (Ms. Waters) each will control 30 minutes.
The Chair recognizes the gentleman from Texas.
Mr. HENSARLING. Mr. Chairman, I yield myself such time as I may
consume.
Mr. Chairman, we are now into the sixth year of the Obama
administration, and probably the two most common comments I hear from
my constituents are ``I just can't make ends meet in this economy'' and
``Washington has become arrogant, unaccountable, and out of touch.'' At
the apex of these sentiments, lies the newly minted Dodd-Frank
government agency known as the CFPB. Although many have yet to hear of
it, the CFPB is perhaps the single most powerful and least accountable
Federal agency in all of Washington.
First, let's speak of its power. Mr. Chairman, when it comes to our
credit cards, our auto loans, our mortgages, the CFPB has unbridled
discretionary power not only to make them less available and more
expensive, but to absolutely take them away.
What does an agency with this kind of power do? It imposes rule like
the qualified mortgage rule, or QM for short. Mr. Chairman, what does
QM do? According to Federal Reserve data, because of QM, roughly one-
third of Black and Hispanic borrowers would not meet the requirements
of a QM loan.
CoreLogic, which analyzes mortgage data, has said:
Only half of today's mortgage originations meet QM
requirements.
That is egregiously unfair to hardworking Americans.
One of my small town community bankers in east Texas told me
recently:
Because of QM, I can't tell you the number of times we have
had to tell our good low-to-moderate income customers that we
can no longer loan them money to purchase a home to live in.
Mr. Chairman, this is what an agency with too much discretionary
power does. It can actually abuse consumers, taking away their
homeownership opportunities. That is unfair.
Let's look at what happens to an agency that is not held accountable.
Today, the CFPB is spending $145 million to renovate a $150 million
headquarters building they don't even own. The renovation rate is three
times the average Washington, D.C., luxury class A renovation rate.
Well, what does $145 million buy?
Well, it is $461 per square foot in office renovations. Mr. Chairman,
that is more per square foot than was spent to build the Trump World
Tower. More than the Trump World Tower. At $461 per square foot, that
was more money than it cost to build the Bellagio hotel and casino in
Las Vegas, which at the time, I am told, was the most expensive hotel
ever built. Mr. Chairman, this is more money to renovate a building
they don't own than Dubai's Burj Khalifa, the single tallest skyscraper
in the world. Ironically enough, the architectural firm which designed
the Burj Khalifa in Dubai is the same world renowned architectural firm
that the CFPB paid over $7 million to design their headquarter
renovations.
Now, according to public documents, Mr. Chairman, some of the
Bureau's renovations include ``a reflective carnelian granite water
table'' that will ``lure in the curious passerby.'' Also for $145
million of hard-earned taxpayer money, the Bureau is buying ``a shady
tree bosque'' to facilitate ``chance interactions in a removed place of
rest and contemplation.'' I mean, I can't make this up, Mr. Chairman.
This is how hard-earned money is being squandered. Here it is, the
architectural drawings which have been filed publicly.
I have to tell you, Mr. Chairman, I have a lot of people in my
district in east Texas who live in mobile homes. They can't afford
carnelian granite water tables that apparently the CFPB is going to
enjoy that my constituents have to pay for, and the only shady tree
bosque to be found in east Texas in the Fifth District are those where
hardworking ranchers work their cattle.
{time} 1445
Instead of rest and contemplation to be enjoyed by CFPB's employees,
because of such blatant waste, my constituents, instead of rest and
contemplation, lay awake at night wondering how they are going to pay
the bills and make ends meet.
Mr. Chairman, this is what an unaccountable Federal Government agency
does. It squanders the people's money because it is not their own and
they are not accountable to the people's representatives.
So that is why we are here today, Mr. Chairman. We are here to pass
H.R. 3193, the Consumer Financial Freedom and Washington Accountability
Act, whose primary author, Mr. Duffy of Wisconsin, has done excellent
work, along with many other members of our committee. This is a
package, Mr. Chairman, of commonsense reforms designed to make the CFPB
more accountable and more transparent to the American people.
This bill replaces the Bureau's single, unaccountable director with a
bipartisan board. It puts the Bureau's employees--whose compensation
and benefits average $178,521, it puts them on the civil service pay
scale. It introduces a safety and soundness check on its regulations
and gives the American people greater control over the massive, massive
quantities of personal financial data that the Bureau is collecting and
maintaining on them at this time.
Mr. Chairman, we do need consumer protection, but consumers just
don't need to be protected from Wall Street; they need to be protected
from Washington as well. H.R. 3193 will protect them from the CFPB, and
the House should pass it without delay today.
I reserve the balance of my time.
Ms. WATERS. Mr. Chairman, I yield myself such time as I may consume.
I rise today in strong opposition to H.R. 3193, legislation that
would gut the Consumer Financial Protection Bureau, an agency that has
been a critical and effective advocate for our Nation's consumers.
Today's vote is just the latest chapter in a relentless Republican
attack on consumer protection.
[[Page H2029]]
Since opening its doors in 2011, the CFPB has gone to bat for those
who have been subject to the deceptive practices of unscrupulous
financial institutions. Though it has been immensely successful,
Republicans have tried to undercut it in every way possible.
Mr. Chairman, in just over 2 years, CFPB's enforcement actions have
resulted in over $3 billion being directly refunded to more than 9.7
million consumers and servicemembers.
The CFPB has ensured that all consumers have fair and transparent
access to consumer financial products and services. It has written
important mortgage rules that prevent lenders from engaging in the
risky and irresponsible practices that led to the collapse of the
housing market and fueled the 2008 global financial crisis; and it
continues to go after industries and institutions that, for years, have
not been held accountable for abusive and deceptive practices.
The CFPB ensures that the tens of millions of consumers who interact
with large consumer reporting agencies, debt collectors, payday
lenders, and nonbanks originating mortgage loans have an advocate in
their corner.
In fact, in fiscal year 2013, the CFPB was a party in 13 enforcement
actions related to deceptive marketing, unlawful debt collection,
discrimination on the basis of age, unlawful charging of fees, and
fraudulent mortgage relief schemes, among other violations.
Since the Consumer Financial Protection Bureau opened its doors, more
than 269,000 individual consumer complaints have been received, and it
has stood up for our Nation's Active Duty military who so greatly serve
us, returning more than $12.5 million to them under the Military
Lending Act.
Just yesterday, CFPB announced a lawsuit against a large for-profit
college chain, accusing it of preying on students by pushing them into
high-cost loans, very likely to end in default.
But my friends on the other side of the aisle don't believe that we
should have a consumer advocate in government. They would prefer that
these unscrupulous actors continue to take advantage of consumers
without interference.
The simple fact is that H.R. 3193 would accomplish this goal,
obstructing the CFPB's ability to protect consumers from deceptive
marketing, unlawful debt collection, lending discrimination, overcharge
fees, and other illegal activity. The bill does so by undermining
CFPB's leadership, ending its autonomy, and tying its funding to
Congressional appropriations, among other ways.
In fact, Republicans have brought this bill to the floor claiming a
cost savings, but they know that the only way a savings is realized is
by slashing the budget of the CFPB, the sole agency charged with
consumer financial protections.
But that is not all. The provisions included in this measure would
eliminate the position of the CFPB director in favor of some five-
member commission that would increase bureaucracy--encouraging,
inviting--and encumber its ability to take action on behalf of
consumers. It would water down the CFPB's rulemaking authority by
lowering the bar for overturning its rules.
Many of the amendments offered today would make this bill even worse.
For example, the measure offered by Congressman DeSantis would repeal
the Bureau's exclusive rulemaking authority, dispersing responsibility
for protecting consumers among the same regulators who failed miserably
in this task in the run-up to the financial crisis.
It is striking to listen to my friends on the opposite side of the
aisle talk about the importance of consumer protection and then push a
measure that is an obvious attempt to completely undermine and obstruct
the CFPB's ability to protect consumers, students, seniors, and
servicemembers.
If holding the Bureau accountable to its mission to protect American
consumers truly is a Republican's goal, then why are we considering a
bill which is strongly opposed by more than 100 organizations with long
records of standing up for the interest of consumers?
I would urge my colleagues to oppose this damaging measure so the
CFPB can continue its outstanding work.
I reserve the balance of my time.
Mr. HENSARLING. Mr. Chairman, I am happy to yield 2 minutes to the
gentlelady from West Virginia (Mrs. Capito), the distinguished chairman
of our Financial Institutions and Consumer Credit Subcommittee and a
real leader in preserving consumer opportunity and rights.
Mrs. CAPITO. Mr. Chairman, I would like to thank the chairman of our
committee for his leadership and for yielding me time this afternoon.
I would also like to thank my colleagues Mr. Duffy, Mr. Bachus, and
Mr. Neugebauer for their leadership in drafting the components of this
bill before us today.
As we have heard, the debate before us today is not new. We have been
working for the past 3 years to enact commonsense structural reforms to
the CFPB. During debate in the last Congress, our friends on the other
side of the aisle said that it was premature to reform this burgeoning
agency. They argued that it was too early to tell how the Bureau would
operate.
Well, 2\1/2\ years later, this is what we know: The Bureau continues
to be unresponsive to bipartisan requests for information about their
operations. For example, last spring, the Bureau released guidance for
indirect auto lending practices.
Over the last year, Republican and Democrat Members have requested
information, both in person and in writing, about the data the Bureau
used to support their guidance. Despite these requests, the Bureau
refuses to provide substantive answers to the Members' questions.
Over the last year, Members--and I have in particular--expressed
significant concern about the effect the CFPB's new rules will have on
mortgage availability for low- to moderate-income borrowers. Despite
this, the CFPB has moved forward with the rules.
We have also heard that the Bureau is spending over $100 million to
renovate its headquarters. As we learned, the renovation per square
foot will cost more than building the Trump World Tower and the
Bellagio.
These examples are indicative of an agency that is unaccountable to
Congress and to the American taxpayers. Moving the Bureau's leadership
structure to a bipartisan commission will ensure that there is a
diversity of opinion as the agency crafts new rules, no matter who the
President is.
A more diverse leadership structure will result in more balanced
rules that provide consumers with sufficient transparency to choose the
financial products that best suits their needs.
We are also bringing greater accountability to this agency by putting
the Bureau on the regular appropriations schedule. Budgetary control is
a critical tool for this Congress, no matter who the President is, to
ensure the actions of this agency truly benefits consumers.
I thank the sponsors for their hard work.
Ms. WATERS. Mr. Chairman, I yield 2 minutes to the gentlewoman from
New York (Mrs. Carolyn B. Maloney), ranking member on the Subcommittee
on Capital Markets and Government Sponsored Enterprises.
Mrs. CAROLYN B. MALONEY of New York. Mr. Chairman, I thank the
gentlelady for yielding and for her hard work on the Financial Services
Committee.
I rise in strong opposition to H.R. 3193, which is a blatantly
partisan assault on the CFPB and on American consumers.
I think it is telling that just 4 months after the first government
shutdown in 17 years, the Republicans want to remove the CFPB's
independent source of funding and subject it to Congress' deeply
dysfunctional appropriations process.
It is telling because it exposes the true purpose of this bill. It is
not to make the CFPB more accountable, but rather to undermine, defund,
and hinder its ability to act to protect consumers in every possible
way.
The dysfunction that led to last year's 16-day shutdown is exactly
why we gave the CFPB an independent source of funding in Dodd-Frank. We
wanted to insulate the CFPB from the political games and partisan
brinksmanship that, unfortunately, became a staple of the
appropriations process.
[[Page H2030]]
Another key reason for creating the CFPB was to make sure that we
have at least one regulator whose sole purpose is protecting consumers.
Prior to the financial crisis, consumer protection had, unfortunately,
become an afterthought of the banking regulators whose primary mission
was protecting the safety and soundness of the banks, but not
consumers.
{time} 1500
When Congress created the CFPB, the whole point was to create a
regulator whose sole focus would be to protect consumers. The reason
Congress did this was that, prior to the financial crisis, consumers
were an afterthought, a secondary thought, a third thought, or usually
not even thought about at all. So it was a huge step forward to have a
department that was focused on protecting consumers from new products
that were harmful and from innovations that were not tested that were
harmful to the consumers and the economy as a whole, which led to the
financial crisis.
This was a huge step forward for consumers when it was created.
Unfortunately, this bill before us today is a huge step backwards
because it would give the safety and soundness regulators more
authority to veto the CFPB's consumer protections in the name of bank
profits--just like in the old days. Let's remember that, in just its
first 2\1/2\ years, the CFPB has already made huge strides on a number
of important consumer protections--from new mortgage protections to
credit cards to payday lending.
An independent source said the credit card bill of rights that was
supported by the CFPB saves consumers $20 billion a year. That is a
huge step forward for consumers, and the Bureau has been willing to
make sensible changes when it has needed to. Last year, the Bureau
adopted amendments to the CARD Act that would allow stay-at-home
spouses to take out credit cards in their own names. This was a
commonsense fix for an unintended problem for stay-at-home spouses who
were creditworthy, and they made the decision so that they were able to
get these credit cards. That is a huge step forward, and I worked with
Mrs. Capito on it from across the aisle. The Bureau continues to work
hard to develop consumer safeguards in rapidly growing areas, such as
prepaid cards and overdraft protection, both of which many Members on
both sides have a keen interest in seeing going forward.
In short, the CFPB's work has already made the lives of American
consumers and our constituents better on a day-to-day basis. This bill
would undermine these results, and it would weaken the Consumer
Financial Protection Bureau, so I strongly urge my colleagues to oppose
the bill.
I would like to place in the Record independent organizations--
literally well over 100--that are in support of the CFPB and that are
in opposition to this bill. They are good government groups, credit
groups, individual legislators, and local and State partners, all of
whom are in opposition to the bill that undermines the work of the
CFPB, which is there to protect consumers.
Following Are the Partners of Americans for Financial Reform.
All the organizations support the overall principles of AFR
and are working for an accountable, fair and secure financial
system. Not all of these organizations work on all of the
issues covered by the coalition or have signed on to every
statement.
AARP; A New Way Forward; AFL-CIO; AFSCME; Alliance For
Justice; American Income Life Insurance; American Sustainable
Business Council; Americans for Democratic Action, Inc.;
Americans United for Change; Campaign for America's Future;
Campaign Money; Center for Digital Democracy; Center for
Economic and Policy Research; Center for Economic Progress;
Center for Media and Democracy; Center for Responsible
Lending; Center for Justice and Democracy; Center of Concern;
Center for Effective Government; Change to Win; Clean Yield
Asset Management.
Coastal Enterprises Inc.; Color of Change; Common Cause;
Communications Workers of America; Community Development
Transportation Lending Services; Consumer Action; Consumer
Association Council; Consumers for Auto Safety and
Reliability; Consumer Federation of America; Consumer
Watchdog; Consumers Union; Corporation for Enterprise
Development; CREDO Mobile; CTW Investment Group; Demos;
Economic Policy Institute; Essential Action; Green America;
Greenlining Institute; Good Business International; HNMA
Funding Company.
Home Actions; Housing Counseling Services; Home Defender's
League; Information Press; Institute for Agriculture and
Trade Policy; Institute for Global Communications; Institute
for Policy Studies: Global Economy Project; International
Brotherhood of Teamsters; Institute of Women's Policy
Research; Krull & Company; Laborers' International Union of
North America; Lawyers' Committee for Civil Rights Under Law;
Main Street Alliance; Move On; NAACP; NASCAT; National
Association of Consumer Advocates; National Association of
Neighborhoods; National Community Reinvestment Coalition;
National Consumer Law Center (on behalf of its low-income
clients); National Consumers League.
National Council of La Raza; National Council of Women's
Organizations; National Fair Housing Alliance; National
Federation of Community Development Credit Unions; National
Housing Resource Center; National Housing Trust; National
Housing Trust Community Development Fund; National
NeighborWorks Association; National Nurses United; National
People's Action; National Urban League; Next Step;
OpenTheGovernment.org; Opportunity Finance Network; Partners
for the Common Good; PICO National Network; Progress Now
Action; Progressive States Network; Poverty and Race Research
Action Council; Public Citizen; Sargent Shriver Center on
Poverty Law.
SEIU; State Voices; Taxpayer's for Common Sense; The
Association for Housing and Neighborhood Development; The
Fuel Savers Club; The Leadership Conference on Civil and
Human Rights; The Seminal; TICAS; U.S. Public Interest
Research Group; UNITE HERE; United Food and Commercial
Workers; United States Student Association; USAction;
Veris Wealth Partners; Western States Center; We the
People Now; Woodstock Institute; World Privacy Forum;
UNET; Union Plus; Unitarian Universalist for a Just
Economic Community.
List of State and Local Partners
Alaska PIRG; Arizona PIRG; Arizona Advocacy Network;
Arizonans For Responsible Lending; Association for
Neighborhood and Housing Development NY; Audubon Partnership
for Economic Development LDC, New York NY; BAC Funding
Consortium Inc., Miami FL; Beech Capital Venture Corporation,
Philadelphia PA; California PIRG; California Reinvestment
Coalition; Century Housing Corporation, Culver City CA;
CHANGER NY; Chautauqua Home Rehabilitation and Improvement
Corporation (NY); Chicago Community Loan Fund, Chicago IL;
Chicago Community Ventures, Chicago IL; Chicago Consumer
Coalition; Citizen Potawatomi CDC, Shawnee OK; Colorado PIRG;
Coalition on Homeless Housing in Ohio; Community Capital
Fund, Bridgeport CT; Community Capital of Maryland, Baltimore
MD; Community Development Financial Institution of the Tohono
O'odham Nation, Sells AZ.
Community Redevelopment Loan and Investment Fund, Atlanta
GA; Community Reinvestment Association of North Carolina;
Community Resource Group, Fayetteville A; Connecticut PIRG;
Consumer Assistance Council; Cooper Square Committee (NYC);
Cooperative Fund of New England, Wilmington NC; Corporacion
de Desarrollo Economico de Ceiba, Ceiba PR; Delta Foundation,
Inc., Greenville MS; Economic Opportunity Fund (EOF),
Philadelphia PA; Empire Justice Center NY; Empowering and
Strengthening Ohio's People (ESOP), Cleveland OH;
Enterprises, Inc., Berea KY; Fair Housing Contact Service OH;
Federation of Appalachian Housing; Fitness and Praise Youth
Development, Inc., Baton Rouge LA; Florida Consumer Action
Network; Florida PIRG; Funding Partners for Housing
Solutions, Ft. Collins CO; Georgia PIRG; Grow Iowa
Foundation, Greenfield IA; Homewise, Inc., Santa Fe NM.
Idaho Nevada CDFI, Pocatello ID; Idaho Chapter, National
Association of Social Workers; Illinois PIRG; Impact Capital,
Seattle WA; Indiana PIRG; Iowa PIRG; Iowa Citizens for
Community Improvement; JobStart Chautauqua, Inc., Mayville
NY; La Casa Federal Credit Union, Newark NJ; Low Income
Investment Fund, San Francisco CA; Long Island Housing
Services NY; MaineStream Finance, Bangor ME; Maryland PIRG;
Massachusetts Consumers' Coalition; MASSPIRG; Massachusetts
Fair Housing Center; Michigan PIRG; Midland Community
Development Corporation, Midland TX; Midwest Minnesota
Community Development Corporation, Detroit Lakes MN; Mile
High Community Loan Fund, Denver CO; Missouri PIRG; Mortgage
Recovery Service Center of L.A.
Montana Community Development Corporation, Missoula MT;
Montana PIRG; New Economy Project; New Hampshire PIRG; New
Jersey Community Capital, Trenton NJ; New Jersey Citizen
Action; New Jersey PIRG; New Mexico PIRG; New York PIRG; New
York City Aids Housing Network; New Yorkers for Responsible
Lending; NOAH Community Development Fund, Inc., Boston MA;
Nonprofit Finance Fund, New York NY; Nonprofits Assistance
Fund, Minneapolis M; North Carolina PIRG; Northside
Community Development Fund, Pittsburgh PA; Ohio Capital
Corporation for Housing, Columbus OH; Ohio PIRG;
OligarchyUSA; Oregon State PIRG; Our Oregon; PennPIRG;
Piedmont Housing Alliance, Charlottesville VA; Michigan
PIRG; Rocky Mountain Peace and Justice Center, CO; Rhode
Island PIRG.
Rural Community Assistance Corporation, West Sacramento CA;
Rural Organizing
[[Page H2031]]
Project OR; San Francisco Municipal Transportation Authority;
Seattle Economic Development Fund; Community Capital
Development; TexPIRG; The Fair Housing Council of Central New
York; The Loan Fund, Albuquerque NM; Third Reconstruction
Institute NC; Vermont PIRG; Village Capital Corporation,
Cleveland OH; Virginia Citizens Consumer Council; Virginia
Poverty Law Center; War on Poverty--Florida; WashPIRG;
Westchester Residential Opportunities Inc.; Wigamig Owners
Loan Fund, Inc., Lac du Flambeau WI; WISPIRG.
Small Businesses
Blu; Bowden-Gill Environmental; Community MedPAC;
Diversified Environmental Planning; Hayden & Craig, PLLC; Mid
City Animal Hospital, Phoenix AZ; UNET.
Mr. HENSARLING. Mr. Chairman, it is now my honor to yield 1 minute to
the gentleman from Virginia (Mr. Cantor), the distinguished majority
leader, who has been a tireless advocate for consumer choice and
freedom throughout this debate on this unaccountable Bureau and who has
led our Congress' effort to bring bills to the floor to stop government
abuse.
Mr. CANTOR. I thank both gentlemen from Texas for their leadership on
this issue.
Mr. Chairman, I rise today in support of the Consumer Financial
Freedom and Washington Accountability Act.
Our constituents deserve an open government that can easily be held
accountable. We in the House have got to be focused on reforming this
government so we can create an America that works again. The Founders
of our country created this democratic system to include a series of
checks and balances to prevent any institution from becoming too
powerful, and, today, it is as important as ever to keep those checks
and balances strong.
Right now, the Consumer Financial Protection Bureau is an independent
agency within the Federal Reserve System that is full of unelected
bureaucrats who enjoy an unprecedented amount of power with a serious
lack of accountability to any of the three branches of government.
American consumers should not have to fear Federal bureaucrats who
can eliminate access to their credit options, collect information on
their personal finances without their knowledge or consent, or limit
the availability of a mortgage due to the onerous Qualified Mortgage
rule that the CFPB put in place last month.
Working families who are struggling to make ends meet during these
hard economic times should also not have to worry about their hard-
earned tax dollars being spent so recklessly and irresponsibly by
government agencies. We have recently learned that the Federal
Reserve's inspector general opened up an investigation to find out why
a renovation to the CFPB's headquarters skyrocketed from $55 million to
$145 million in under 2 years. This reckless waste is one of the most
dangerous kinds of government abuses. The American workers' pocketbooks
are not Washington's ATM machine.
The bill before us today provides solutions to these problems with
important structural changes that will place the levers of power in a
bipartisan panel, as opposed to a single director, while subjecting the
CFPB to the regular appropriations and oversight processes,
guaranteeing more accountability.
This is an opportunity for us to show the American people that we are
committed to restoring trust in government. By passing these
commonsense reforms in a bipartisan fashion, we can hold Washington
more accountable to the people we are supposed to protect. So let's
pass this bill and take one step closer to stopping government abuse.
Again, I would like to thank Chairman Hensarling, Chairman
Neugebauer, Representatives Duffy, Bachus, Westmoreland, and Fincher,
and the rest of the Financial Services Committee for their hard work on
this issue. I urge my colleagues in the House to support this
legislation so we can begin to make America work again for everybody.
Ms. WATERS. Mr. Chairman, I yield 2 minutes to the gentleman from
Massachusetts, Representative Lynch, who is a member of the Financial
Services Committee and who is the ranking member on the Subcommittee on
Federal Workforce, U.S. Postal Service and the Census.
Mr. LYNCH. I thank the gentlelady for yielding and for her work on
behalf of American consumers.
Mr. Chairman, I rise today in opposition to H.R. 3193, the so-called
Consumer Financial Protection and Soundness Improvement Act.
Let's be clear about what my friends on the other side of the aisle
are trying to do here today.
They would really like to completely repeal the Consumer Financial
Protection Bureau. Many of the sponsors of this act are the ones who
tried to defeat the creation and empowerment of the CFPB to begin with.
To be mindful, this is the only financial regulator solely responsible
for protecting American consumers from unfair, deceptive, and abusive
financial products. My friends on the other side of the aisle would
like to destroy it, so they are trying to pass off this ``death by a
thousand cuts'' approach as improvements to the Bureau's structure.
This bill will bog down the consumer bureau in bureaucratic and
congressional red tape. It will make it more difficult for the Bureau
to seek out and retain qualified employees. It will also allow the
companies that the Consumer Financial Protection Bureau is supposed to
be regulating to have more information, better information--more
accurate information, more extensive information--about consumers than
the CFPB that is responsible for protecting them will have.
In sum, it will make the Consumer Financial Protection Bureau a
second-class and ineffective regulator, sending the signal to bad
actors in our financial markets that we are not really serious about
consumer protections, and this bill will do nothing to make consumers
safer.
I urge all of my colleagues to join me in voting ``no'' on H.R. 3193.
Mr. HENSARLING. Mr. Chairman, I am now pleased to yield 1\1/2\
minutes to the gentleman from Texas (Mr. Neugebauer), the chairman of
the Housing and Insurance Subcommittee, who is a key coauthor of this
bill, ensuring that the CFPB is accountable through the congressional
appropriations process, and who is a real champion of preserving
housing opportunities from Washington bureaucrats.
Mr. NEUGEBAUER. I thank Chairman Hensarling.
Mr. Chairman, I think it is kind of interesting that my colleagues on
the other side of the aisle seem to want to justify this ``spending
gone wild'' agency, an agency that last year alone had a budget
overreach of nearly $100 million.
That is the reason that I introduced title II of this bill, which
really says two things: one, that we take this agency out of the Fed
and make it a stand-alone entity; and two, that we put it on budget, a
normal appropriations process, where Members of Congress can begin to
sit down and look at the budget that is presented to them by the
agency--how you are going to spend their money. Maybe we would have
prevented some of these overreaches that happened.
I don't think that anybody thinks that government should just have an
unlimited purse, and this is what this agency basically has. If they
run out of money--spend too much money--they just reach over into the
Fed and take that money out. No other agency that I know of in the
government has that, and I think the hardworking American people and
the hardworking people of the 19th District feel like agencies ought to
come and bring their budgets, like in other areas of government, and
explain and prove why they need that money.
Interestingly enough, the CFPB has 1,500 employees, 60 percent of
them making over $100,000 and 5 percent of those making more than
Cabinet secretaries. Mr. Chairman, again, we think there needs to be
more accountability here.
The CHAIR. The time of the gentleman has expired.
Mr. HENSARLING. I yield the gentleman an additional 30 seconds.
Mr. NEUGEBAUER. This agency can draw up to $500 million each year,
really. In fact, some of the requests for transfer were done on small
pieces of paper.
Can you imagine a three-line paragraph saying, ``Please send over
$150 million. We have run out of money''?
Mr. Chairman, H.R. 3193 begins to bring the accountability that the
American taxpayers not only deserve but desire.
Ms. WATERS. Mr. Chairman, I yield 4 minutes to the gentleman from
Washington, Representative Heck, who is a
[[Page H2032]]
member of the Financial Services Committee and who has paid a lot of
attention to this issue.
Mr. HECK of Washington. I thank the ranking member very much.
Mr. Chairman, I am from Washington State, and I am about to commit a
sacrilege. We could have saved a lot of trees and a lot of time if we
had had a one-sentence bill that simply said: ``End the Consumer
Financial Protection Bureau.''
We could have had an honest debate then about whether we should have
any government agency with the mandate to protect consumers from
deceptive financial marketing and abusive financial practices. We could
have had a discussion about what the CFPB has accomplished thus far and
whether it is accessible to Americans, whether its proposed streamlined
forms are more effective at educating Americans, whether its rules are
thoroughly researched and revised after comments from all sides.
Instead, we are having a debate over reorganizing and defunding and
subordinating and other matters of process and organization that are
all, frankly, designed to kill CFPB by a thousand cuts.
I think the proposition here is fairly straightforward and remains a
mystery to me. If one desires to do away with the CFPB, why not have
the courage to introduce that bill straightforwardly?
Ordinarily, I don't assign motives or characterize intent on the part
of people who advance legislation. The fact of the matter is many of
those who are advocating for this bill's passage opposed the creation
of the agency flat out. The fact of the matter is that a companion
bill--granted, one not in this--even re-titled the agency and took the
words ``consumer protection'' out. The fact of the matter is, if there
were more credible arguments in support of this legislation, I think we
would be a little more careful with the facts.
Here is a fact: there isn't a penny of taxpayer dollars that supports
CFPB. It is fee-based. Here is a fact omitted: more than 60 percent of
the costs associated with the alleged remodel budget, which is an
estimate--a fact omitted--is associated with upgrading to code. Now, I
know for another fact that the people who are making that argument do
not want civil servants to occupy unsafe and unhealthy buildings.
{time} 1515
But most importantly--this is the part that really gets me--we are
going to spend a lot of time on this today and in committee, and we are
going to pass it to the Senate, and we all know what its fate is going
to be, right down into the ground. Well, that is fine. People have the
right to make their point, but what is the opportunity cost of making
that point in committee and on the floor? At least one of the
opportunity costs is getting to work on actual regulatory relief.
We have several bipartisan bills for regulatory relief. Some form of
the CLEAR Act, not all the Members on my side support it, but some do.
We could actually get to work on regulatory relief if we would set
aside our efforts for this messaging and exercise.
As for me, no matter what the form, I am going to vote ``no'' on any
bill that kills the CFPB, any bill. I will vote ``no'' because of the
work the CFPB does on behalf of my constituents.
I will vote to preserve the Office of Servicemember Affairs and the
great work that Holly Petraeus is doing. They have a special mandate to
protect the men and women in uniform. I have the privilege to represent
Joint Base Lewis-McChord, tens of thousands of uniformed personnel. If
you ever talk to anybody--I don't see how anybody who has a military
base even near their district can support this legislation.
The CHAIR. The time of the gentleman has expired.
Ms. WATERS. I yield an additional 1 minute to the gentleman.
Mr. HECK of Washington. Mr. Chair, I don't see how anybody who has a
military base anywhere near their district can support this
legislation.
I will vote to protect the experts who are laying the groundwork for
the first national consumer protection rules on payday loans and other
short-term, high-interest loans. I will vote to defend the Bureau's
work protecting students from high-interest-rate loans and creating a
uniform set of borrower rights and protections for all student loans,
public or private. If we really want a stable, predictable business
environment, we wouldn't be going down this path.
At the end of the day, again, the proposition is very
straightforward. If you support consumer protection, you will vote
``no'' on this legislation. If you oppose consumer protection, you will
vote ``yes.'' But I entreat you, I plead with you, to please vote
``no.''
Mr. HENSARLING. Mr. Chairman, I yield myself 5 seconds to encourage
the gentleman from Washington to read section 1017 of the Dodd-Frank
Act, and he would discover that the CFPB is funded by the Federal
Reserve, which happens to be taxpayer money.
Mr. Chairman, at this time I am happy to yield 1 minute to the
gentleman from Missouri (Mr. Luetkemeyer), the vice chairman of our
Housing and Insurance Subcommittee.
Mr. LUETKEMEYER. Mr. Chairman, my colleagues have done a good job of
listing some of the problems of CFPB. I would like to give you an
example of some of the overreach of this new agency already.
A small community bank in my district, they purchased a small lending
company. With that lending company comes the lease of the building that
they are operating their office out of. The CFPB comes in and says the
lease is $300 per month over the course of 9 months over what the rate
should be for that area. They go in and tell the bank that they are
going to fine them $107,000 for this lease, which is nothing the bank
made. It doesn't impact consumers, yet they are fined $107,000. The
bank eventually settles for $80--plus $30,000 in attorneys' fees.
Mr. Chairman, this is an example already of this new agency's
overreach. It has got to stop. H.R. 3193 does that. I urge support for
that bill.
Ms. WATERS. Mr. Chair, I am waiting for additional speakers, and I
reserve the balance of my time.
Mr. HENSARLING. Mr. Chairman, I am now pleased to yield 1\1/2\
minutes to the gentleman from New Jersey (Mr. Garrett), the chairman of
our Capital Markets and GSE Subcommittee.
Mr. GARRETT. Mr. Chairman, the Bureau of Financial Protection claims
unlimited power to define and regulate every conceivable financial
transaction in the country, and yet it claims to be unaccountable to no
one. So I find it disturbing that the Bureau collects private credit
card data on Americans and does so without the knowledge of those
Americans. Its effort is so vast that the Bureau collects information
on over 990 million credit card accounts.
According to Dr. Thomas Stratmann, Professor of Economics and Law at
George Mason University:
There are costs and potential harms to collecting and
maintaining massive databases of personal financial
information; including the potential for abuse, or violation
of consumer privacy, and security concerns in the event of a
data breach.
Mr. Chairman, the Bureau believes that actions must go unquestioned,
and now it wants your credit card information, too. This legislation
before us protects citizens by protecting and prohibiting the Bureau
from collecting Americans' nonpublic personal financial information
without first receiving the express permission of the consumer.
I urge my colleagues from both sides of the aisle to respect the
financial privacy of all Americans and support this legislation.
Ms. WATERS. I continue to reserve the balance of our time.
Mr. HENSARLING. Mr. Chairman, I am pleased now to yield 1\1/2\
minutes to the gentleman from North Carolina (Mr. McHenry), the
chairman of the Oversight and Investigation Subcommittee of the
Financial Services Committee.
Mr. McHENRY. Mr. Chair, I appreciate my colleagues for their
leadership on this important legislation.
I rise in support of it to bring some balance to an otherwise
unaccountable bureaucratic agency, perhaps the most powerful agency in
government with the least amount of public accountability. It has no
accountability to the administration, very little to Congress, and even
less to the American people. As a result, it should come as no surprise
that this Bureau has operated with less transparency and less concern
for fiscal discipline than even a very low bar and low standard we hold
for our Federal tax dollars.
[[Page H2033]]
Due to this lack of accountability, certain expenditures have been
called into question; in fact, their building expenditures, which is a
beautiful release of a $150 million plan to renovate a building that
they are leasing. Now, it is a very rare thing and pretty silly in real
estate to do an enormous upfit for a building that costs $153 million--
that is the appraised value--and to put $150 million at $461 a square
foot into that building. It makes no sense unless you understand that
these are your tax dollars at work to build luxury a couple of blocks
from the White House.
These buildings are just another example of why this agency needs to
be held accountable to not just the American people and the taxpayers,
but to the taxpaying public and those of us who care about having
access to good financial products while protecting.
So that is why I support this legislation.
Ms. WATERS. Mr. Chair, I continue to reserve the balance of my time.
Mr. HENSARLING. Mr. Chairman, I am now happy to yield 1 minute to the
gentleman from Virginia (Mr. Hurt), the vice chairman of our Capital
Markets and GSE Subcommittee.
Mr. HURT. I thank the chairman for his leadership on this issue. I
thank him for yielding.
Mr. Chairman, today I rise in support of the Consumer Financial
Freedom and Washington Accountability Act.
As I travel across our Virginia's Fifth District, I continue to hear
troubling stories about the impacts of the CFPB. I have heard from
consumers, community banks, and credit unions about how the unchecked
authority of the CFPB is restricting consumer choice, creating an
atmosphere of economic uncertainty, and increasing costs.
Real consumer protection requires that we shift power from Washington
bureaucrats to American consumers by providing access to competitive
markets with choice, information, and accountability. This bill would
help achieve that goal by adding much-needed oversight and transparency
to this far-reaching new government agency without weakening consumer
protection.
These bipartisan checks and balances will protect our community banks
and credit unions who play a critical role in providing capital to our
small businesses and working families. At a time when too many
Americans remain out of work, it is critical that we continue to
support policies that will help restore certainty to the marketplace,
create jobs, and protect our consumers.
I urge support of this good bill.
Ms. WATERS. Mr. Chairman, I am very pleased to yield 4 minutes to the
gentleman from Minnesota (Mr. Ellison), the chief deputy whip who also
serves on the Financial Services Committee and is cochair of the
Progressive Caucus.
Mr. ELLISON. Mr. Chairman, let me thank our ranking member for the
time.
I urge a ``no'' vote on H.R. 3193 today. It is a bad bill, and it is
bad for consumers, bad for Americans.
As I listened to my colleagues, one of them mentioned the CFPB offers
uncertainty. Well, here is some certainty for you. You cannot cheat
consumers. That is certainty enough for me. Another one said, well, you
know, the CFPB doesn't offer choice. Here is a choice. You can offer
any product that is fair and transparent to consumers.
That is exactly what my friends on the other side of the aisle object
to. They don't want average Americans to be able to get a financial
services product that is fair, that is balanced, and that makes sense
in the marketplace.
You have nothing to fear from the CFPB if you do not offer a product
that is designed to bilk consumers. If you do, I can see why you might
be quite upset at the activity of the CFPB.
The bottom line is this is a bad bill. It will set our country back,
and in fact, I believe consumer protection is at the very heart of the
recession that we just went through.
Now, of course, we have heard ad nauseam that it was the housing
goals and it was the other sort of measures that caused the recession,
but the fact is the recession was caused because large numbers of home
buyers were bilked into mortgages that they couldn't afford, that were
difficult to understand, with high pressure tactics and were
incentivized, even to be guided and steered to products that were more
high cost than the ones they qualified for.
Then we packaged these things into mortgage-backed securities that
were unsound to begin with. The rating agencies said they were fine,
took out a form of insurance on them, and then when the house of cards
fell, the whole economy went with it.
Consumer protection is at the heart of the problem. Consumer
protection is the solution to this problem, and so this effort to
undermine the CFPB today under the guise of H.R. 3193 is wrong.
Mr. Chair, we are at a whose side are you on moment. Are you on the
side of Mom and Pop, of the small business owner, of the consumer
trying to get a house loan or other form of credit? Or are you on
someone else's side who is not in favor of a fair product?
I have said to my community bankers, look, your opponents before the
crash didn't have the regulator; now, everyone has one. The CFPB offers
a level playing field for all. Now everybody offering mortgage products
has a degree of accountability. This is good for the financial services
sector, not bad.
Since the CFPB was created following the financial crisis, it has
received, Mr. Chair, more than 250,000 consumer complaints. Mr. Chair,
who are these 250,000 complaints supposed to be directed to but for an
agency that is responsive to them? Who would my friends on the other
side of the aisle have these people go to to try to get their problems
solved? We know that they weren't being listened to before the CFPB.
Now that the CFPB exists, a quarter of a million complaints and
untold numbers of complainants have come forward to say, Please help
me. Half of these complaints have been in the mortgage servicing area
alone. Of the 3,135 complaints from my own State of Minnesota, 1,320
have been related to mortgage issues. This bill threatens to turn off
access to these consumers, and I will not stand silently by while they
do this.
This is a bad bill.
The CHAIR. The time of the gentleman has expired.
{time} 1630
Ms. WATERS. Mr. Chairman, I yield an additional 1 minute to the
gentleman.
Mr. ELLISON. Mr. Chairman, this is a bad bill. Among the CFPB's many
accomplishments, they have refunded more than $3 billion--billion with
a ``b''--to more than 9 million consumers. That is good fiscal
stewardship.
Now, the CFPB oversees industries that previously were not regulated
by the Federal government, including credit reporting agencies, nonbank
mortgage providers, debt collection agencies and payday lenders. All of
that consumer protection would end if this bad piece of legislation
were to pass.
Say no, resoundingly. Vote ``no'' on this bill.
Mr. HENSARLING. Mr. Chairman, I am now pleased to yield 1 minute to
the gentleman from Indiana (Mr. Stutzman).
Mr. STUTZMAN. Mr. Chairman, I rise in support of the Consumer
Financial Freedom and Washington Accountability Act. I thank
Congressman Duffy and Chairman Hensarling for their leadership on this
issue.
The CFPB is disgracefully unaccountable to the American people.
Richard Cordray and future directors of the Bureau are virtually
unchecked by Congress and the President.
We have seen what happens when bureaucrats so powerful are left so
unaccountable. In its 3 short years, the CFPB has burned through its
budgets and riffled through the private financial data of millions of
Americans.
Hoosiers deserve consumer protections, but they also deserve
integrity and accountability. After talking with families, small
businesses, community banks, and credit unions back home, I am proud to
support the commonsense reforms before the House today.
Let's replace the CFPB's Director with a five-member commission to
ensure healthy discussion and bring more seats to the table. Let's rein
in the CFPB's budget so that the Members of Congress from both parties
can protect their constituents. Let's prohibit government bureaucrats
from using private personal information without the consumers' consent.
[[Page H2034]]
Mr. Chairman, let's protect and empower American consumers, not
Washington bureaucrats.
Ms. WATERS. Mr. Chairman, I continue to reserve the balance of my
time.
Mr. HENSARLING. Mr. Chairman, can I inquire whether the gentlelady
has any more speakers?
Ms. WATERS. Mr. Chairman, we have one speaker on the way.
Mr. HENSARLING. We have plenty of speakers here, Mr. Chairman. I
would be glad to lend the gentlelady a few if she needs some people to
speak.
Otherwise, Mr. Chairman, I yield 1 minute to the gentleman from South
Carolina (Mr. Mulvaney).
Mr. MULVANEY. Mr. Chairman, I rise today in support of H.R. 3193
which, amongst many other things, replaces the single Director with a
five-member commission.
I would remind my friends across the aisle that this brings the bill
into the original spirit of Dodd-Frank, which, when it left this House
several years ago, had eventually a five-member commission. All we are
trying to do is get back to that original intention.
Further, during the discussions in committee, we focused on the
membership of that commission and how it would be a decent idea to have
people who are on the commission who actually knew something about the
industries that they were regulating.
For example, the CFPB regulates insured banks, non-depository
financial institutions, credit unions, all of which are very unique.
Wouldn't it be nice to actually have folks regulating those industries
who knew something about them?
This is not rare in the world of regulation. The FDIC, which oversees
State banks, has been required to have someone on its commission for
years who actually has experience regulating State banks. It has not
been a problem for the FDIC, and it would not be a problem for the
CFPB.
We need to pass this bill for a variety of reasons but, first and
foremost, we need to replace the single Director with a five-man
commission, and for that, I hope that we pass the bill.
Ms. WATERS. Mr. Chairman, I yield an additional 2 minutes to the
gentleman from Minnesota (Mr. Ellison).
Mr. ELLISON. Mr. Chairman, I thank the ranking member.
I only rise for one simple point, and that is to correct the Record
when it comes to this claim that the CFPB engages in massive, excessive
data collection of consumers' information. It is not true.
Anyone listening to this debate, Mr. Chairman, should know that the
CFPB does not monitor the accounts of particular consumers and does not
track the financial behavior or activities of any individual customer.
The CFPB is already prohibited by law from collecting personally
identifiable information in the course of its market-monitoring
responsibility. Although the Bureau does collect certain information as
part of its responsibility to identify and monitor market trends and
proactively address emerging consumer credit issues, this information
is deliberately depersonalized and aggregated to ensure consumers'
sensitive information is protected.
Now, this is critically important because speaker after speaker is
trying to scare consumers into believing that somebody is looking at
their personal data. It is not true. It is not true, and I think it is
important for people listening to this debate to know that.
Requiring the Bureau to seek consent on an individual level in order
for it to access aggregated or anonymous data is not only a hindrance
to the CFPB's core mission of regulating the entities that offer
consumer financial products or services, but it is a burdensome
requirement and, of course, intended simply to slow down, gum up,
undermine, and break down the institution itself.
It is not true. People's data is safe. Looking for aggregate trends
and proactively addressing emerging problems, as would have been very
helpful as we got closer to the financial foreclosure crisis just a few
years ago, is what the CFPB is doing.
It is doing what it is supposed to do. It is doing it well, and I
don't know why any fair-minded person would be against that.
Mr. HENSARLING. Mr. Chairman, I yield myself 30 seconds to say that
the CFPB is building a database containing full credit report data on
53 million borrowers who took out mortgages since 1998. The project
manager said: ``It is easy to reverse-engineer and identify the people
in our database.''
CFPB has a credit card database of at least 991 million credit cards
and approximately 136 million Americans. The Bureau is collecting a
database of credit reports on 8.6 million Americans. They continue to
collect personalized data from Americans without their permission. It
is unacceptable.
Mr. Chairman, I yield 1 minute to the gentleman from Florida (Mr.
Ross).
Mr. ROSS. Mr. Chairman, the Consumer Financial Protection Bureau is
one of the largest Federal undertakings in recent history, created by
Congress yet unaccountable to Congress. One man is tasked with
oversight of essentially the entire financial services industry.
Director Cordray works hard for consumers, but no single individual
can have sufficient expertise to make determinations that impact low-
income families, community banks, mortgage lending, auto lending,
credit card users and students.
A real estate lawyer in my district who represents clients who
specialize in lending to low-income people, whose clients have a
foreclosure rate of less than 5 percent, commented:
The only way these folks can own a home is to finance the
purchase from an unconventional source. My clients get
financial information from the prospective buyers relating to
their ability to pay, but it does not meet the thresholds
established to qualify as a Qualified Mortgage.
This year, that lawyer advised all his clients to discontinue
lending. This is the same story we are receiving from our community
banks.
These are the results of an unaccountable agency with insular focus.
H.R. 3193 would bring much-needed accountability and ensure that enough
experts are at the decision table that American families are actually
protected by Federal regulations, not harmed by unintended
consequences, a situation we have seen all too often in recent months.
Ms. WATERS. Mr. Chairman, I continue to reserve the balance of my
time.
Mr. HENSARLING. Mr. Chairman, I would like to inquire how much time
is remaining on each side.
The CHAIR. The gentleman from Texas has 9\1/2\ minutes remaining. The
gentlewoman from California has 4\1/2\ minutes remaining.
Mr. HENSARLING. Mr. Chairman, I yield 1 minute to the gentlewoman
from Missouri (Mrs. Wagner).
Mrs. WAGNER. Mr. Chair, I want to thank the chairman for yielding me
time. I particularly want to thank the gentleman from Wisconsin (Mr.
Duffy) for his leadership on this important issue and for standing up
on behalf of hardworking American families.
I rise today in support of H.R. 3193 and urge its passage by this
House.
The Financial Services Committee has, on multiple occasions, asked
the question ``Who protects consumers from the Bureau of Consumer
Financial Protection?''
Unfortunately, the answer for the last 3\1/2\ years has been nobody.
Today, this House has an opportunity to change that.
The underlying bill includes a number of provisions to ensure that
the very basic principles of good government apply to the Bureau, and
it puts an end to the special treatment granted to the Bureau under
Dodd-Frank.
These are commonsense, pro-consumer provisions that will help protect
hardworking American families and taxpayers from yet another Washington
bureaucracy that thinks it knows what is in their best interest.
I urge the passage of this bill.
Ms. WATERS. Mr. Chairman, I continue to reserve the balance of my
time.
Mr. HENSARLING. Mr. Chairman, I yield 1 minute to the gentleman from
Kentucky (Mr. Barr).
Mr. BARR. Mr. Chairman, this legislation is about holding Washington
accountable. The Bureau of Consumer Financial Protection is one of the
most powerful and unaccountable agencies in the entire Federal
Government. Unfortunately, the Bureau reaches deeply into the everyday
lives of Kentuckians.
In following its partisan agenda, the Bureau makes it harder for
small businesses on Main Street to get a loan to
[[Page H2035]]
grow their business. The Bureau makes it harder for families in
Kentucky to obtain a mortgage to purchase a home, including for
manufactured homes. The Bureau even makes it harder to get financing
discounts that help Kentuckians purchase their car or truck.
The Bureau is so out of touch that it even regulates Bath County, in
my district, one of the most rural counties in America, as ``non-
rural.''
These concerns are not only voiced inside of Washington. Just last
week I was in Powell County, and a small business owner raised his hand
during my public event to talk about how the Bureau's rules are harming
his ability to do business in his community.
This avalanche of red tape coming out of the Bureau is making life
harder for millions of Americans, which is why we need to pass this
legislation that will reform the Bureau in a way that reins in the
misguided rules that stem from its partisan excesses and unaccountable
culture.
Ms. WATERS. Mr. Chairman, I yield 2 minutes to the gentleman from
Virginia (Mr. Connolly), the ranking member of the Oversight and
Government Reform Subcommittee on Government Operations.
Mr. CONNOLLY. Mr. Chairman, I thank my distinguished ranking member
and my friend from California.
Mr. Chairman, I rise to oppose this latest Republican assault on the
CFPB. It is truly baffling to see my colleagues' continued attempts to
undermine the only Federal regulator created to protect American
consumers.
Contrary to the talking points of the other side, this mash-up of
bills will only burden the CFPB with more bureaucracy, not less. For
example, the bill would replace the Director, who has been on the job
for just 6 months, after the Senate Republicans held up his
confirmation for 2 years, with a cumbersome five-person commission.
The bill also seeks to take the CFPB out of the Federal Reserve and
make it subject to annual congressional appropriations. My Republican
colleagues claim this is to provide tougher oversight, but that is a
ruse. They have already stated they would defund CFPB altogether if
they could.
As ranking member of the House Oversight Subcommittee on Government
Operations, I firmly believe in accountability, but I would note that
Director Cordray has been before this Congress 46 times since CFPB was
created. I would call that pretty responsive oversight.
After the 2008 Wall Street meltdown, safeguarding our financial
system ought to be a primary concern, but this bill would, once again,
place the interest of banks over those of consumers. As we saw during
the financial crisis, innovation led to a wave of untested and
sophisticated financial products, allowing dishonest actors to take
advantage of many Americans.
Dodd-Frank, which my Republican friends fought against tooth-and-
nail, remains Congress' sole substantive response to the greatest
financial meltdown since the Great Depression.
My colleagues on the other side of the aisle found it necessary not
only to fight against any attempt at regulating Wall Street, but waged
much of the battle against the CFPB itself. Republicans in the Senate
waged a 700-day battle to prevent a confirmation of CFPB's Director--
700 days.
In just a short amount of time, since his confirmation, CFPB has
become an effective champion for all Americans. It has fielded more
than 280,000 consumer complaints.
The CHAIR. The time of the gentleman has expired.
Ms. WATERS. I yield 10 seconds to the gentleman.
Mr. CONNOLLY. This bill is a bad idea. It is an anti-consumer bill. I
urge my colleagues to vote against it.
Mr. HENSARLING. Mr. Chairman, I yield 1 minute to the gentleman from
Pennsylvania (Mr. Rothfus).
{time} 1545
Mr. ROTHFUS. Mr. Chairman, much more accountability and transparency
is needed in Washington, especially at the Consumer Financial
Protection Bureau.
The Bureau wields broad and unchecked power over our economy, from
banks to businesses to anyone who uses credit or payment plans. Abuses
of that power, enabled by a lack of accountability and transparency,
harms families and businesses up and down Main Streets in Pennsylvania
and across the Nation.
That is why I rise today in strong support of the Consumer Financial
Freedom and Washington Accountability Act. Importantly, this
commonsense legislation better protects consumers by prohibiting the
Bureau from using personal and private financial information without
their knowledge and consent.
It also makes the Bureau subject to the regular authorization and
appropriations process. This increases the American people's ability to
demand accountability through their elected representatives.
The legislation will also replace a single and unaccountable director
with a bipartisan five-member commission and establish more reasonable
thresholds for reviewing and repealing regulations.
These changes will help rein in the regulatory overreach coming from
Washington, D.C., elites. It will ensure a diversity of viewpoints is
represented whenever the Bureau makes decisions that will directly
impact families and businesses across the Nation.
These very reasonable reforms will protect consumers and our Nation's
financial system by providing for more rigorous oversight of the
powerful and unaccountable Bureau.
I urge my colleagues to support this good-government legislation.
Ms. WATERS. I reserve the balance of my time.
Mr. HENSARLING. Mr. Chairman, I am now especially pleased to yield 3
minutes to the gentleman from Wisconsin (Mr. Duffy), who is the vice
chairman of our Financial Institutions and Consumer Credit Subcommittee
and the chief author of the legislation of which we debate today.
Mr. DUFFY. Mr. Chairman, I thank the chairman for all the work that
he has put in on this consumer financial protection reform bill. This
is really a bill about accountability and transparency.
As has been discussed today, the CFPB is collecting information on
almost 1 billion credit cards--1 billion credit cards--which means if
you are an American and you have a credit card, the CFPB is collecting
and monitoring your transactions.
So what we have done is said: Listen, if you are here to protect a
consumer, why don't you ask the consumer for permission and consent to
take their information?
If we care about the American citizenry--if we care about consumers
and don't care about Big Government and the information they have on
us, let's give them the power. Let's ask them. That is all we do.
Empower the American citizenry.
Again, let's empower Congress and the American people as well. When
we don't fund agencies through this institution, we lose authority; we
lose oversight.
Let's take that power and control back into Congress, and let's
actually put the power back in the hands of the people; but if you
empower the Fed to fund this agency, you have taken the control away
from this institution. That is wrong.
One of the most important reform parts of this bill is meaningful to
me because I come from rural America; and the way that the law is
structured is that if a bad rule comes from the CFPB, it can be
overturned.
You can go to FSOC and say: Listen, this rule is going to create
systemic risk; meaning, it is going to have a negative impact on our
economy. It should be overturned.
Now think about what kind of financial institutions can go to FSOC
and say: This rule is bad; overturn it.
Is it the small community bank? Is it the credit union in rural
America? Heck, no. But if you are a big Wall Street bank, you have been
given a voice in the way my friends across the aisle have structured
this law.
Big banks on Wall Street who created the crisis are given a voice to
have rules from the CFPB overturned, but you have left the small banks
and credit unions in my district voiceless to say: this rule is going
to hurt us.
That is wrong.
Listen, we want to talk about protecting consumers, giving a voice to
consumers, making sure Big Government isn't breathing down their backs.
Want to know who protects consumers and finance? Our credit unions,
[[Page H2036]]
our small community banks. And guess what? The Credit Union National
Association, they endorse and support our bill. The National
Association of Federal Credit Unions endorsed and support this bill.
The Independent Community Bankers endorsed and support this bill.
This is the right thing to do. Let's empower Congress and empower the
American people. Let's reform the CFPB and actually make it work.
Ms. WATERS. I reserve the balance of my time.
Mr. HENSARLING. Mr. Chairman, I am now pleased to yield 1 minute to
the gentleman from North Carolina (Mr. Pittenger).
Mr. PITTENGER. Mr. Chairman, I thank Chairman Hensarling for the time
and for allowing me to speak on this important issue; and I also thank
the gentleman from Wisconsin (Mr. Duffy) for his the leadership on this
legislation.
This legislation is absolutely necessary to bring pragmatic reforms
to CFPB. The CFPB needs transparency. It needs accountability. It needs
privacy reforms.
The first main goal of this legislation is to replace the single all-
powerful director with a five-person independent commission. This will
allow for a healthy debate and to bring rules and regulations that are
proposed at this agency.
It would put CFPB on a regular budgetary cycle with annual
appropriations. This will shield the very American taxpayer from
wasteful spending and allow Congress the proper oversight that this
agency absolutely needs.
One of the key provisions of this bill prohibits CFPB from accessing,
collecting, and analyzing the American people's personal financial data
without their express permission.
In the wake of the regulation tsunami coming from D.C., it is time
that Congress exercise its authority to help rein in government
bureaucrats and help provide the clarity to business owners across the
country.
I urge all of my colleagues to support this bill.
Ms. WATERS. I reserve the balance of my time.
Mr. HENSARLING. Mr. Chairman, I am very pleased to yield 1 minute to
the gentleman from Pennsylvania (Mr. Kelly).
Mr. KELLY of Pennsylvania. Mr. Chairman, I rise in strong support of
H.R. 3193.
I am an automobile dealer, and my family has been in the business for
63 years.
CFPB is kind of interesting because what we have done now, we have
absolutely abandoned the rulemaking process, and we have gone to
another type of influencing people; and the relationship that car
dealers have with their customers is sometimes to navigate a very
difficult financial system to get their loans arranged.
But no, we want to do it a different way. We want to do it with
guidance. Here is the way it kind of works. It is like the policeman
walking his beat and pulling out his billy club and tapping it on his
hand and saying: I strongly suggest you follow my guidance.
There is no oversight on this. This group of people are going to make
decisions by not even consulting us, the people. We do represent the
people, and I would like to think that we can come together once in a
while to do what is in the best interest of the people that we
represent, not a Republican issue, not a Democratic issue, but an
American issue.
We have to do these things. Again, strong suggestions that you follow
my guidance, as opposed to letting people sit down and negotiate
themselves, that is not the way the American system works.
It never has, never will. It never should have happened. CFPB should
have never come to the light of day.
Ms. WATERS. I yield myself the balance of my time.
Mr. Chairman, I want to, once again, reiterate my strong opposition
to this harmful legislation which will weaken the Consumer Financial
Protection Bureau, an agency created to protect consumers and defend
them against bad actors and practices throughout our financial system.
Just in case we are losing sight of what this Bureau is all about, we
have many citizens out there who are the victims of false advertising.
People advertise something. They advertise a price. They advertise a
product. They go to buy the product. It is not there. It costs more
money.
Debt collectors, how many of our citizens have been harassed by debt
collectors, calling them in the middle of the night, asking for
information, and charging them with things they have never been
involved in?
Don't forget those payday loans. Poor people run out of money, go to
a payday lender, get charged 500 percent for a payday loan.
What about those private postsecondary schools where all of those
students who are trying to get an education are forced into getting
loans, are encouraged to get loans, get ripped off, don't learn
anything, can't get a job?
What about those mortgage lenders who tricked all of those people
into mortgage loans and they end up losing their homes? What about
discrimination against the aged? What about what they did to our good
men and women who served in different branches of the military for all
of us and got ripped off by payday lenders?
This is what the Consumer Financial Protection Bureau is all about. I
don't know how anyone could think that we shouldn't have protection for
our consumers. Our consumers are finding out that, finally, we have
something.
They are calling our telephone number, (855) 411-2372, to get some
help. They are going to our Web site, www.consumerfinance.gov. Over
289,000 citizens have gone to this www.consumerfinance.gov Web site.
They have called this telephone number, (855) 411-2372, because,
finally, they have a bureau that is paying attention to all of the rip-
offs, all of the fraudulent advertising, all of the overcharging of
fees, all of what they did not have protection from in the past.
We realized, at some point in time, that all of our regulatory
agencies that were supposed to be paying attention were not. Now, we
have protection.
I yield back the balance of my time.
Mr. HENSARLING. Mr. Chairman, I yield myself the balance of my time.
To protect consumers, you first need to make sure they have the power
to consume; and under the Obama administration economic policies, tens
of millions of our fellow citizens are either unemployed or
underemployed. They don't have the income to consume. That is not
consumer protection.
Part of the problem is the CFPB because true consumer protection, Mr.
Chairman, empowers consumers in innovative, transparent, competitive
markets; and it respects the intelligence and the dignity of the
American citizen; and it preserves their economic liberty to choose the
mortgages, the credit cards, and, yes, even the payday loans that they
choose to consume.
But instead, Mr. Chairman, many of my friends on the other side of
the aisle would love to take away ``In God we trust'' and put up there
``In government we trust.''
The American people are tired of unaccountable, arrogant Washington
bureaucrats, the unaccountable, the unelected who are taking away their
homeownership opportunities, taking away their credit cards, and
insulting them by saying: I am from Washington. I am smarter than you.
I am better than you. I know what is best.
It is time for us to pass the Consumer Financial Freedom and
Washington Accountability Act; and I particularly thank Messrs. Duffy,
Bachus, and Neugebauer for authoring this key piece of legislation. I
urge its passage.
I yield back the balance of my time.
Mr. CUMMINGS. Mr. Chair, the Consumer Financial Protection Bureau
(CFPB), which is a cornerstone of the Dodd-Frank Act, has already
proven invaluable in ensuring that financial products offered to
American consumers comply with federal law and are not abusive or
misleading.
The CFPB has brought transparency, accountability and clarity to our
markets.
Because of the CFPB's work, our residential mortgage lending system
is now governed by standards that cap the points and fees a lender may
charge, limit risky loan products, and prohibit loans with terms longer
than 30 years.
CFPB has also enacted new rules to end the abuses in the mortgage
servicing process that were so common before the financial crisis.
These rules require servicers to credit payments the day they are
received and to respond to customer inquiries in a timely manner.
[[Page H2037]]
They also limit ``dual tracking'' to ensure borrowers are not
foreclosed on while they wait to see if they qualify for a loan
modification.
And through its enforcement actions, CFPB has already recovered
approximately $3 billion for consumers who have been the victims of
abuse. As of this month, the CFPB has received and is processing more
than nine thousand complaints from residents of Maryland alone.
Unfortunately, rather than ensuring the CFPB has all of the resources
it needs to help consumers, Republicans in the House have routinely
sought to undermine the CFPB and the bill before us today simply
continues that attack.
The only way to protect our constituents from entities that would
take advantage of them is to vote against this bill and oppose all
efforts to roll back the consumer protections enacted in the Dodd-Frank
legislation.
Mrs. BEATTY. Mr. Chair, I rise today in strong opposition to the
Consumer Financial Protection Safety and Soundness Improvement Act,
H.R. 3193.
As designed by Dodd-Frank, the Consumer Financial Protection Bureau--
CFPB--is the only agency whose final rules can be overruled by a vote
of other financial regulators.
This was explicitly included in Dodd-Frank to ensure that CFPB
guidelines do not unduly jeopardize the safe functioning of the U.S.
financial system.
However, the inaptly named H.R. 3193 is yet another transparent
attempt by Members of the majority to weaken the authority of the only
federal agency responsible for protecting consumers in their financial
dealings.
If enacted, H.R. 3193 would not only broaden the ability to overturn
CFPB rules, but would also lower the threshold required to do so.
This would make it more difficult for the CFPB to meet its mission of
creating and enforcing federal consumer financial laws, and would be a
significant step backward in the effort to improve oversight and
supervision of our nation's financial institutions.
It is repugnant to me that after millions of Americans had their
financial security imperiled by the predatory practices of mortgage
lenders, originators and servicers, that Members of this House would
consider this bill designed to weaken the one financial regulator
focused on returning temperance to deals where there was once greed,
and prudence to markets where there was previously ``irrational
exuberance.''
I urge my colleagues to stand up for the American people by voting
``no'' on H.R. 3193.
Mr. VAN HOLLEN. Mr. Chair, H.R. 3193 is a clear attempt to undermine
the independence and effectiveness of the Consumer Financial Protection
Bureau. As such, I oppose passage of this legislation.
The Consumer Financial Protection Bureau (CFPB) was created by the
Dodd-Frank Wall Street Reform Bill in response to widespread market
abuses that helped precipitate the financial crisis and is the first
ever independent watchdog charged with the sole task of protecting the
financial lives of America's families. Since its inception, the CFPB
has handled nearly 270,000 consumer complaints and secured more than $3
billion in relief for almost 10 million consumers through enforcement
actions against bad actors who were violating the law. It has
established important oversight for industries ranging from payday
lenders to debt collectors to credit reporting agencies. And it has
generally received high marks from industry leaders and consumer
advocates alike for the openness and evenhandedness of its operations.
Not surprisingly, the Senate confirmed the CFPB's first director
Richard Cordray by a bipartisan vote of 66-34 in the summer of last
year.
Rather than building on this track record of success, H.R. 3193 would
weaken the CFPB by bureaucratizing its structure, placing additional
constraints on its operations, slashing its funding and subjecting that
funding to the political pressures of the annual appropriations
process. If the majority really believed the annual appropriations
process was necessary to ensure the proper oversight of our federal
banking regulators, this legislation would be recommending similar
treatment for the Federal Reserve, or the Office of the Comptroller of
the Currency. It doesn't--which tells you all you need to know about
the consistency of the conviction underlying this bill.
In my judgment, the CFPB is succeeding at its job of protecting
consumers in a fair and transparent marketplace. Accordingly, I urge a
no vote.
Mr. AL GREEN of Texas. Mr. Chair, I would like to express my
opposition to H.R. 3193, the Consumer Financial Protection Safety and
Soundness Improvement Act of 2013. This legislation would strip
essential mandates from an agency that was created to protect consumers
from risky practices that caused the financial crisis.
The Consumer Financial Protection Bureau (CFPB) has successfully
refunded over $3 billion to consumers who were financially harmed by
deceptive practices. The vital protections the CFPB provides must not
be overlooked; without its oversight, consumers will be exposed to
greater risk in financial markets.
Since its creation in 2011, the CFPB has collected over $80 million
in civil penalties from financial institutions that harmed consumers.
They also have handled more than 269,900 complaints from consumers.
Thirty million consumers would not be subject to federal protections
from improper debt collections if the CFPB did not exist.
Additionally, without the presence of the CFPB, twelve million
consumers that use pay day lending would not be protected by federal
supervision, and 200 million consumer credit reports would not be
protected from unscrupulous behavior. The CFPB should be applauded for
its efforts to end harmful practices in the marketplace. Rather than
abrogate this successful agency, the CFPB should retain its current
structure and mandate so that it can continue to be an exemplary model
for other bank regulators.
The CHAIR. All time for general debate has expired.
Pursuant to the rule, the bill shall be considered for amendment
under the 5-minute rule.
It shall be in order to consider as an original bill for the purpose
of amendment under the 5-minute rule an amendment in the nature of a
substitute consisting of the text of Rules Committee Print 113-36
modified by the amendment printed in part A of House Report 113-350.
That amendment in the nature of a substitute shall be considered as
read.
The text of the amendment in the nature of a substitute is as
follows:
H.R. 3193
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Consumer Financial Freedom
and Washington Accountability Act''.
SEC. 2. FINANCIAL PRODUCT SAFETY COMMISSION.
(a) Establishment.--Section 1011 of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5491) is amended to read as
follows:
``SEC. 1011. ESTABLISHMENT OF THE FINANCIAL PRODUCT SAFETY
COMMISSION.
``(a) Establishment.--There is established an independent
commission to be known as the `Financial Product Safety
Commission' (hereinafter referred to in this section as the
`Commission'), which shall regulate the offering and
provision of consumer financial products or services under
the Federal consumer financial laws. The Commission shall be
considered an Executive agency, as defined in section 105 of
title 5, United States Code. Except as otherwise provided
expressly by law, all Federal laws dealing with public or
Federal contracts, property, works, officers, employees,
budgets, or funds, including the provisions of chapters 5 and
7 of title 5, shall apply to the exercise of the powers of
the Commission.
``(b) Authority to Prescribe Regulations.--The Commission
may prescribe such regulations and issue such orders in
accordance with this title as the Commission may determine to
be necessary for carrying out this title and all other laws
within the Commission's jurisdiction and shall exercise any
authorities granted under this title and all other laws
within the Commission's jurisdiction.
``(c) Composition of the Commission.--
``(1) In general.--The Commission shall be composed of the
Vice Chairman for Supervision of the Federal Reserve System
and 4 additional members who shall be appointed by the
President, by and with the advice and consent of the Senate,
from among individuals who--
``(A) are citizens of the United States; and
``(B) have strong competencies and experiences related to
consumer financial protection.
``(2) Staggering.--The members of the Commission appointed
under paragraph (1) shall serve staggered terms, which
initially shall be established by the President for terms of
1, 2, 4, and 5 years, respectively.
``(3) Terms.--
``(A) In general.--Each member of the Commission appointed
under paragraph (1), including the Chair, shall serve for a
term of 5 years.
``(B) Removal.--The President may remove any member of the
Commission appointed under paragraph (1).
``(C) Vacancies.--Any member of the Commission appointed
under paragraph (1) appointed to fill a vacancy occurring
before the expiration of the term to which that member's
predecessor was appointed (including the Chair) shall be
appointed only for the remainder of the term.
``(D) Continuation of service.--Each member of the
Commission appointed under paragraph (1) may continue to
serve after the expiration of the term of office to which
that member was appointed until a successor has been
appointed by the President and confirmed by the Senate,
except that a member may not continue to serve more than 1
year after the date on which that member's term would
otherwise expire.
``(E) Other employment prohibited.--No member of the
Commission appointed under paragraph (1) shall engage in any
other business, vocation, or employment.
[[Page H2038]]
``(d) Affiliation.--With respect to members appointed
pursuant to subsection (c)(1), not more than 2 shall be
members of any one political party.
``(e) Chair of the Commission.--
``(1) Appointment.--The Chair of the Commission shall be
appointed by the President from among the members of the
Commission appointed under subsection (c)(1).
``(2) Authority.--The Chair shall be the principal
executive officer of the Commission, and shall exercise all
of the executive and administrative functions of the
Commission, including with respect to--
``(A) the appointment and supervision of personnel employed
under the Commission (other than personnel employed regularly
and full time in the immediate offices of members of the
Commission other than the Chair);
``(B) the distribution of business among personnel
appointed and supervised by the Chair and among
administrative units of the Commission; and
``(C) the use and expenditure of funds.
``(3) Limitation.--In carrying out any of the Chair's
functions under the provisions of this subsection the Chair
shall be governed by general policies of the Commission and
by such regulatory decisions, findings, and determinations as
the Commission may by law be authorized to make.
``(4) Requests or estimates related to appropriations.--
Requests or estimates for regular, supplemental, or
deficiency appropriations on behalf of the Commission may not
be submitted by the Chair without the prior approval of the
Commission.
``(f) No Impairment by Reason of Vacancies.--No vacancy in
the members of the Commission shall impair the right of the
remaining members of the Commission to exercise all the
powers of the Commission. Three members of the Commission
shall constitute a quorum for the transaction of business,
except that if there are only 3 members serving on the
Commission because of vacancies in the Commission, 2 members
of the Commission shall constitute a quorum for the
transaction of business. If there are only 2 members serving
on the Commission because of vacancies in the Commission, 2
members shall constitute a quorum for the 6-month period
beginning on the date of the vacancy which caused the number
of Commission members to decline to 2.
``(g) Seal.--The Commission shall have an official seal.
``(h) Compensation.--
``(1) Chair.--The Chair shall receive compensation at the
rate prescribed for level I of the Executive Schedule under
section 5313 of title 5, United States Code.
``(2) Other members of the commission.--The 3 other members
of the Commission appointed under subsection (c)(1) shall
each receive compensation at the rate prescribed for level II
of the Executive Schedule under section 5314 of title 5,
United States Code.
``(i) Initial Quorum Established.--During any time period
prior to the confirmation of at least two members of the
Commission, one member of the Commission shall constitute a
quorum for the transaction of business. Following the
confirmation of at least 2 additional commissioners, the
quorum requirements of subsection (f) shall apply.
``(j) Offices.--The principal office of the Commission
shall be in the District of Columbia. The Commission may
establish regional offices of the Commission in order to
carry out the responsibilities assigned to the Commission
under the Federal consumer financial laws.''.
(b) Bringing the Commission Into the Regular Appropriations
Process.--Section 1017 of the Consumer Financial Protection
Act of 2010 (12 U.S.C. 5497) is amended--
(1) in subsection (a)--
(A) by amending the heading of such subsection to read as
follows: ``Budget, Financial Management, and Audit.--'';
(B) by striking paragraphs (1), (2), and (3);
(C) by redesignating paragraphs (4) and (5) as paragraphs
(1) and (2), respectively; and
(D) by striking subparagraphs (E) and (F) of paragraph (1),
as so redesignated;
(2) by striking subsections (b) and (c);
(3) by redesignating subsections (d) and (e) as subsections
(b) and (c), respectively; and
(4) in subsection (c), as so redesignated--
(A) by striking paragraphs (1), (2), and (3) and inserting
the following:
``(1) Authorization of appropriations.--There is authorized
to be appropriated to carry out this title $300,000,000 for
each of fiscal years 2014 and 2015.''; and
(B) by redesignating paragraph (4) as paragraph (2).
(c) Ensuring the Independence of the Commission.--The
Consumer Financial Protection Act of 2010 is amended--
(1) in section 1012(c), (12 U.S.C. 5492 (c)) by striking
paragraphs (2), (3), (4), and (5); and
(2) in section 1014(b), (12 U.S.C. 5494(b)) by striking
``Not fewer than 6 members shall be appointed upon the
recommendation of the regional Federal Reserve Bank
Presidents, on a rotating basis.''.
(d) Conforming Amendments.--
(1) Consumer financial protection act of 2010.--
(A) In general.--Except as provided under subparagraph (B),
the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481
et seq.) is amended--
(i) by striking ``Director of the'' each place such term
appears, other than where such term is used to refer to a
Director other than the Director of the Bureau of Consumer
Financial Protection;
(ii) by striking ``Director'' each place such term appears
and inserting ``Financial Product Safety Commission'', other
than where such term is used to refer to a Director other
than the Director of the Bureau of Consumer Financial
Protection; and
(iii) in section 1002 (12 U.S.C. 5481), by striking
paragraph (10).
(B) Exceptions.--The Consumer Financial Protection Act of
2010 is amended--
(i) in section 1012(c)(4) (12 U.S.C. 5492 (c) (4)), by
striking ``Director'' each place such term appears and
inserting ``Financial Product Safety Commission'';
(ii) in section 1013(c)(3) (12 U.S.C. 5493 (c) (3))--
(I) by striking ``Assistant Director of the Bureau for''
and inserting ``Head of the Office of''; and
(II) in subparagraph (B), by striking ``Assistant
Director'' and inserting ``Head of the Office'';
(iii) in section 1013(g)(2) (12 U.S.C. 5493(g)(2))--
(I) by striking ``Assistant director'' and inserting ``Head
of the office''; and
(II) by striking ``an assistant director'' and inserting
``a Head of the Office of Financial Protection for Older
Americans'';
(iv) in section 1016(a) (12 U.S.C. 5496(a)), by striking
``Director of the Bureau'' and inserting ``Chair of the
Commission''; and
(v) in section 1066(a) (12 U.S.C. 5586(a)), by striking
``Director of the Bureau is'' and inserting ``first member of
the Commission is''.
(2) Dodd-frank wall street reform and consumer protection
act.--The Dodd-Frank Wall Street Reform and Consumer
Protection Act (12 U.S.C. 5301 et seq.) is amended--
(A) in the table of contents for such Act by amending the
item relating to section 1011 to read as follows:
``Sec. 1011. Establishment of the Financial Product Safety
Commission.'';
(B) in section 111(b)(1)(D) (12 U.S.C. 5321(b)(1)(D)), by
striking ``Director'' and inserting ``Chair of the Financial
Product Safety Commission''; and
(C) in section 1447 (12 U.S.C. 1701p-2), by striking
``Director of the Bureau'' each place such term appears and
inserting ``Financial Product Safety Commission''.
(3) Electronic fund transfer act.--Section 920(a)(4)(C) of
the Electronic Fund Transfer Act (15 U.S.C. 1693o-
2(a)(4)(C)), as added by section 1075(a)(2) of the Consumer
Financial Protection Act of 2010, is amended by striking
``Director of the Bureau of Consumer Financial Protection''
and inserting ``Financial Product Safety Commission''.
(4) Expedited funds availability act.--The Expedited Funds
Availability Act (12 U.S.C. 4001 et seq.), as amended by
section 1086 of the Consumer Financial Protection Act of
2010, is amended by striking ``Director of the Bureau'' each
place such term appears and inserting ``Financial Product
Safety Commission''.
(5) Federal deposit insurance act.--Section 2 of the
Federal Deposit Insurance Act (12 U.S.C. 1812), as amended by
section 336(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, is amended by striking ``Director of
the Consumer Financial Protection Bureau'' each place such
term appears and inserting ``Chair of the Financial Product
Safety Commission''.
(6) Federal financial institutions examination council act
of 1978.--Section 1004(a)(4) of the Federal Financial
Institutions Examination Council Act of 1978 (12 U.S.C.
3303(a)(4)), as amended by section 1091 of the Consumer
Financial Protection Act of 2010, is amended by striking
``Director of the Consumer Financial Protection Bureau'' and
inserting ``Chair of the Financial Product Safety
Commission''.
(7) Financial literacy and education improvement act.--
Section 513 of the Financial Literacy and Education
Improvement Act (20 U.S.C. 9702), as amended by section
1013(d)(5) of the Consumer Financial Protection Act of 2010,
is amended by striking ``Director'' each place such term
appears and inserting ``Chair of the Commission''.
(8) Home mortgage disclosure act of 1975.--Section 307 of
the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2806), as
amended by section 1094(6) of the Consumer Financial
Protection Act of 2010, is amended by striking ``Director of
the Bureau of Consumer Financial Protection'' each place such
term appears and inserting ``Financial Product Safety
Commission''.
(9) Interstate land sales full disclosure act.--The
Interstate Land Sales Full Disclosure Act (15 U.S.C. 1701 et
seq), as amended by section 1098A of the Consumer Financial
Protection Act of 2010, is amended--
(A) by amending section 1402(1) (15 U.S.C. 1701(1)) to read
as follows:
``(1) `Chair' means the Chair of the Financial Product
Safety Commission;''; and
(B) in section 1416(a) (15 U.S.C. 1715(a)), by striking
``Director of the Bureau of Consumer Financial Protection''
and inserting ``Chair''.
(10) Real estate settlement procedures act of 1974.--
Section 5 of the Real Estate Settlement Procedures Act of
1974 (12 U.S.C. 2604), as amended by section 1450 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act, is
amended--
(A) by striking ``The Director of the Bureau of Consumer
Financial Protection (hereafter in this section referred to
as the `Director')'' and inserting ``The Financial Product
Safety Commission''; and
(B) by striking ``Director'' each place such term appears
and inserting ``Financial Product Safety Commission''.
(11) S.A.F.E. mortgage licensing act of 2008.--The S.A.F.E.
Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.), as
amended by section 1100 of the Consumer Financial Protection
Act of 2010, is amended--
(A) by striking ``Director'' each place such term appears
in headings and text, other than where such term is used in
the context of the Director of the Office of Thrift
Supervision, and
[[Page H2039]]
inserting ``Financial Product Safety Commission''; and
(B) in section 1503 (12 U.S.C. 5102), by striking paragraph
(10).
(12) Title 44, united states code.--Section 3513(c) of
title 44, United States Code, as amended by section 1100D(b)
of the Consumer Financial Protection Act of 2010, is amended
by striking ``Director of the Bureau'' and inserting
``Financial Product Safety Commission''.
(e) Deeming of Names.--
(1) Bureau of consumer financial protection.--Any reference
in a law, regulation, document, paper, or other record of the
United States to the Bureau of Consumer Financial Protection
shall be deemed a reference to the Financial Product Safety
Commission.
(2) Director.--Any reference in a law, regulation,
document, paper, or other record of the United States to the
Director of the Bureau of Consumer Financial Protection shall
be deemed a reference to the Chair of the Financial Product
Safety Commission.
SEC. 3. RATE OF PAY FOR EMPLOYEES OF THE FINANCIAL PRODUCT
SAFETY COMMISSION.
(a) In General.--Section 1013(a)(2) of the Dodd-Frank Wall
Street Reform and Consumer Protection Act (12 U.S.C.
5493(a)(2)) is amended to read as follows:
``(2) Compensation.--The rates of basic pay for all
employees of the Financial Product Safety Commission shall be
set and adjusted in accordance with the General Schedule set
forth in section 5332 of title 5, United States Code.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to service by an employee of the Financial
Product Safety Commission following the 90-day period
beginning on the date of enactment of this Act.
SEC. 4. CONSUMER RIGHT TO FINANCIAL PRIVACY.
(a) Requirement of the Financial Product Safety Commission
to Obtain Permission Before Collecting Nonpublic Personal
Information.--
(1) Required notification and permission.--Section
1022(c)(9)(A) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C. 5512(c)(9)(A)) is
amended--
(A) by striking ``may not obtain from a covered person or
service provider'' and inserting ``may not request, obtain,
access, collect, use, retain, or disclose'';
(B) by striking ``personally identifiable financial'' and
inserting ``nonpublic personal''; and
(C) by striking ``from the financial records'' and all that
follows through the period at the end and inserting
``unless--
``(i) the Financial Product Safety Commission clearly and
conspicuously discloses to the consumer, in writing or in an
electronic form, what information will be requested,
obtained, accessed, collected, used, retained, or disclosed;
and
``(ii) before such information is requested, obtained,
accessed, collected, used, retained, or disclosed, the
consumer informs the Financial Product Safety Commission that
such information may be requested, obtained, accessed,
collected, used, retained, or disclosed.''.
(2) Application of requirement to contractors of the
financial product safety commission.--Section 1022(c)(9)(B)
of such Act (12 U.S.C. 5512(c)(9)(B)) is amended to read as
follows:
``(B) Application of requirement to contractors of the
financial product safety commission.--Subparagraph (A) shall
apply to any person directed or engaged by the Financial
Product Safety Commission to collect information to the
extent such information is being collected on behalf of the
Financial Product Safety Commission.''.
(3) Definition of nonpublic personal information.--Section
1022(c)(9) of such Act (12 U.S.C. 5512(c)(9)) is amended by
adding at the end the following:
``(C) Definition of nonpublic personal information.--In
this paragraph, the term `nonpublic personal information' has
the meaning given the term in section 509 of the Gramm-Leach-
Bliley Act (15 U.S.C. 6809).''.
(b) Removal of Exemption for the Financial Product Safety
Commission From the Right to Financial Privacy Act.--Section
1113 of the Right to Financial Privacy Act of 1978 (12 U.S.C.
3413) is amended by striking subsection (r).
SEC. 5. CONSUMER FINANCIAL PROTECTION SAFETY AND SOUNDNESS
IMPROVEMENTS.
(a) Council Voting Procedure.--Section 1023(c)(3)(A) of the
Consumer Financial Protection Act of 2010 (12 U.S.C.
5513(c)(3)(A)) is amended--
(1) by striking ``\2/3\'' and inserting ``a majority''; and
(2) by inserting before the period the following: ``,
excluding the Chair of the Financial Product Safety
Commission''.
(b) Review Authority of the Council.--Section 1023 of the
Consumer Financial Protection Act of 2010 (12 U.S.C. 5513) is
amended--
(1) in subsection (a)--
(A) by striking ``may'' and inserting ``shall''; and
(B) by striking ``regulation or provision would put the
safety and soundness of the United States banking system or
the stability of the financial system of the United States at
risk'' and inserting ``regulation which is the subject of the
petition is inconsistent with the safe and sound operations
of United States financial institutions''; and
(2) in subsection (c)--
(A) in paragraph (3)(B)(ii), by striking ``would put the
safety and soundness of the United States banking system or
the stability of the financial system of the United States at
risk'' and inserting ``is inconsistent with the safe and
sound operations of United States financial institutions'';
(B) in paragraph (4)--
(i) by striking subparagraph (B); and
(ii) by redesignating subparagraph (C) as subparagraph (B);
(C) by striking paragraph (5); and
(D) by redesignating paragraphs (6), (7), and (8) as
paragraphs (5), (6), and (7), respectively.
(c) Safety and Soundness Check.--Section 1022(b)(2)(A) of
the Consumer Financial Protection Act of 2010 (12 U.S.C.
5512(b)(2)(A)) is amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii), by adding ``and'' at the end; and
(3) by adding at the end the following:
``(iii) the impact of such rule on the financial safety or
soundness of an insured depository institution;''.
The CHAIR. No amendment to that amendment in the nature of a
substitute shall be in order except those printed in part B of House
Report 113-350. Each such amendment may be offered only in the order
printed in the report, by a Member designated in the report, shall be
considered read, shall be debatable for the time specified in the
report, equally divided and controlled by the proponent and an
opponent, shall not be subject to amendment, and shall not be subject
to a demand for division of the question.
Amendment No. 1 Offered by Mr. Rigell
The CHAIR. It is now in order to consider amendment No. 1 printed in
part B of House Report 113-350.
Mr. RIGELL. I have an amendment at the desk.
The CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Add at the end the following new section:
SEC. 6. ANALYSIS OF REGULATIONS.
Section 1022 of the Consumer Financial Protection Act of
2010 (12 U.S.C. 5512) is amended by adding at the end the
following new subsection:
``(e) Analysis of Regulations.--
``(1) In general.--Each time the Commission proposes a new
rule or regulation, the Commission shall--
``(A) carry out an initial regulatory flexibility analysis
for such proposed rule or regulation, which shall be carried
out as closely as possible to those initial regulatory
flexibility analyses required under section 603 of title 5,
United States Code, but which shall analyze the financial
impact of the proposed rule or regulation on covered persons,
regardless of size; and
``(B) carry out an analysis of whether the proposed rule or
regulation will impair the ability of individuals and small
businesses to have access to credit.
``(2) Report.--The Commission shall issue a report to the
Council on each analysis carried out under paragraph (1), and
make such analysis available to the public.
``(3) Use of existing resources.--The Commission shall use
existing resources to carry out the requirements of this
subsection.''.
The CHAIR. Pursuant to House Resolution 475, the gentleman from
Virginia (Mr. Rigell) and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Virginia.
Mr. RIGELL. Mr. Chairman, I want to thank my friend and colleague
from Texas, Chairman Hensarling, and all of those who worked on this
underlying legislation, H.R. 3193.
My amendment strengthens that legislation, and I really respect how
it was crafted, the legislation that underlies my amendment. It really
is much needed.
{time} 1600
My amendment is focused on one of the most critical ingredients that
is necessary for those that are trying to start a new business or to
grow an existing business, and that is access to credit. Now, I offer
my amendment based on my own real-world experience. It is about 22
years ago that I started my business, and I was able to start it and to
grow it and to say these wonderful words to so many fellow Americans in
Virginia's Second Congressional District, ``You are hired.'' I was able
to say those words because one of the ingredients I had available to me
was access to credit.
I offer my amendment today based, as well, on the clear, united, and
truly rational voice that is being articulated by Virginia's Second
Congressional District, and that is that the Consumer Financial
Protection Bureau is truly and irrefutably, in their view and in mine,
damaging and harming their ability to have access to credit.
Common ground is something that I come to work every day seeking to
advance. I am convinced, absolutely, that it is here and it can be
found. In fact, this gridlock that we so often experience truly is
hurting our country. But
[[Page H2040]]
as I listen to my colleagues so often on the other side--and I have
been up here and had the privilege of serving in this institution 3
years--quite frankly, when I hear statements like we don't care about
consumers, I take offense at this. And I have listened to it for 3
years, and I think that it does a disservice to this House and to the
American people to continually claim that we don't care about the
American consumer or that we don't care about the environment or the
poor or the aged. Indeed we do. And this represents my best judgment,
and the best judgment of so many, that this underlying legislation in
my particular amendment would help consumers. I am convinced of this.
What my amendment does is it requires the Bureau to simply do this:
to consider and to calculate in a very careful way exactly how the
impact--the adverse impact that these regulations that are being put
forth by this organization--would affect credit. Now, indeed, isn't
this common ground? It is really common sense. Before you take any
action to do something, you ought to take a moment to consider what
that action might do in inhibiting individual Americans and businesses
from accessing credit.
I think it is critical, too, that we look at the organization itself.
This is an organization that is really outside of the scope of
accountability that we really should be requiring of each and every
agency in the Federal Government. It is largely outside the
accountability and the influence of Congress. And this is quite
striking: it is largely out of the influence of the President. In a
unique way, and I think in a harmful way, it is largely outside of the
accountability of the court system.
Look, common sense will just tell you that is not a good idea for any
agency to be outside of accountability. Each Member here is accountable
to our own district. The actions that have been taken by this
organization already, sure, we can find a few that have been helpful
and I think ought to continue--taking care of our military and making
sure that businesses operate in an ethical manner--but, overwhelmingly,
what we are seeing is this: that the sum of all things is it is hurting
the American consumer, and it is hurting our ability of fellow
Americans to access credit. That is why I urge support for the
underlying legislation and my amendment.
I reserve the balance of my time.
Ms. WATERS. Mr. Chair, I rise in opposition to the amendment.
The Acting CHAIR (Mr. Marchant). The gentlewoman from California is
recognized for 5 minutes.
Ms. WATERS. Mr. Chair, I yield myself 3 minutes.
I rise in opposition to this amendment, and I will take a moment just
to respond to the gentleman from Virginia who seemed a little bit
disturbed that we would claim that they do not care about consumers.
The proof of the pudding is in the eating, sir, and because of the way
that the Republicans have opposed the Consumer Financial Protection
Bureau, the manner in which we have described today that you have
attempted to dismantle this Bureau, the way that you have tried to deny
it having a strong Director, for all of those reasons, it is absolutely
clear that you do not wish to have a Bureau that protects our
consumers.
And so when we make these charges, we make them because we have
proof. We have the information, we have the actions, and we have all
that you have done to demonstrate that you really don't want a Bureau
to protect the consumers of this country.
The fact is that Americans want banks to be regulated in order to
prevent the kind of economic catastrophe that we are recovering from to
this day. Because Republicans haven't been able to repeal the Dodd-
Frank Act, you have focused on making it impossible for the agencies to
enact the rules required by the Wall Street reform bill. Your new
strategy is to prevent our regulators from functioning by saddling them
with burdensome and duplicative cost-benefit requirements.
Let's take a moment to talk about the cost of the financial crisis.
The United States Department of the Treasury measured the cost of the
financial crisis at $19.2 trillion in loss of household wealth and 8.8
million in lost jobs. Communities of color were hit particularly hard,
losing over 50 percent of their household wealth. Millions of borrowers
have been foreclosed upon, and millions more remain underwater and
struggling to stay in their homes to this day.
A report by the Government Accountability Office on the cost-benefit
analysis of the Dodd-Frank Act stated:
If the cost of a future crisis is expected to be in the
trillions of dollars, then the act likely would need to
reduce the probability of a future financial crisis by only a
small percent for its expected benefit to equal the act's
expected cost.
Beyond all of this, this amendment is a solution in search of a
problem. The Consumer Financial Protection Bureau is already required
to perform cost-benefit analysis on its rules and evaluate impacts on
small businesses. The CFPB has repeatedly demonstrated its commitment
to minimizing the impact of its rules on small banking institutions and
small businesses.
I yield back the balance of my time.
The Acting CHAIR. Members are reminded to address their remarks to
the Chair.
Mr. RIGELL. Mr. Chairman, tell me how much time is remaining, please.
The Acting CHAIR. The gentleman from Virginia has 30 seconds
remaining.
Mr. RIGELL. Mr. Chairman, I appreciate the gentlelady's remarks. I
still hold the view that the sum of all things that I have heard in our
district is that the Bureau is doing more harm than good.
I urge, again, my colleagues to vote for the underlying legislation
and my amendment which would help protect individual Americans and
businesses in their ability to seek credit, which is an essential part
to keeping our economy growing and creating more jobs.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Virginia (Mr. Rigell).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Ms. WATERS. Mr. Chairman, I ask for a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Virginia
will be postponed.
The Chair understands that amendment No. 2 will not be offered.
Amendment No. 3 Offered by Mr. DeSantis
The Acting CHAIR. It is now in order to consider amendment No. 3
printed in part B of House Report 113-350.
Mr. DeSANTIS. Mr. Chair, I offer my amendment.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Add at the end the following:
SEC. 6. REPEAL OF EXCLUSIVE RULEMAKING AUTHORITY.
Section 1022(b) of the Consumer Financial Protection Act of
2010 (12 U.S.C. 5512(b)) is amended by striking paragraph
(4).
The Acting CHAIR. Pursuant to House Resolution 475, the gentleman
from Florida (Mr. DeSantis) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Florida.
Mr. DeSANTIS. Mr. Speaker, James Madison told us in the Federalist
Papers:
If men were angels, no government would be necessary. And
if angels were to govern men, neither external nor internal
controls on government would be necessary.
And so as I look at this agency which lacks all the traditional
measures for constitutional accountability, I am reminded by that
insight. The Founding Fathers understood human nature, and they
understood that people in positions of power will eventually, at some
point, abuse that power. That is just inherent in the nature of man,
and so they built a government to have checks and balances.
As I look at this consumer financial protection agency, I am wowed by
the amount of power that has been invested in this: very limited
executive accountability, the CFPB Director is essentially the
financial czar of the country, and no budget oversight by Congress. I
know we are trying to change that in this bill, but Madison said that
the most effectual check that we have in Congress is the power of the
purse.
There is this huge amount of deference in terms of what judicial
review
[[Page H2041]]
is allowed to be done. The courts are instructed to defer to the CFPB.
The problem with that is that there are a lot of novel concepts in this
bill. Terms are introduced that don't necessarily have a definition in
other regulatory history, and the CFPB is basically going to be given
carte blanche to go forward on that. And when asked about some of these
terms, the CFPB Director said, well, you kind of figure it out when you
see it, and it is a puzzle that we are putting together.
Well, that is not acceptable, and I think the American people need to
have recourse to the courts. So what my amendment does is it
reinstitutes judicial review, and it removes this excessive deference
that has been granted to the CFPB.
I hear reports about all this data that is being collected on
American citizens--credit card transactions and debit card
transactions, millions of these things are being done. Are we just
supposed to say that the people should have no recourse in case that is
abused? We are just supposed to trust the CFPB in terms of how they use
that data?
The bottom line is you have an agency that is combining legislative
power, executive power, and judicial power. That is contrary to our
constitutional structure and contrary to the separation of powers
doctrine, and I don't think most Americans have confidence that some
far, distant Bureau should just be left to their own devices and that
somehow they will be able to make all these decisions better for
individual Americans than they can make for themselves.
So I urge the adoption of my amendment, Mr. Chairman, and I reserve
the balance of my time.
Ms. WATERS. Mr. Chairman, I rise in opposition to the amendment.
The Acting CHAIR. The gentlewoman from California is recognized for 5
minutes.
Ms. WATERS. Mr. Chair, I yield myself 3 minutes.
The Consumer Financial Protection Bureau was designed with one goal
in mind: we were giving consumers a fair shake in the marketplace by
making sure they finally had a regulator who was on their side. The
CFPB is the only agency with the expertise and the mission to focus on
developing trends in the consumer finance marketplace, identify abuses,
and stop them before they lead borrowers into financial ruin.
Prior to the passage of the Dodd-Frank Act, consumer financial laws
were supposed to be enforced by cooperation amongst all of the
regulators. But as we now know all too well, safety and soundness
concerns time and again trumped those of consumer protection, leading
to the system where all of the regulators were responsible and none of
them were accountable.
It was precisely this inattention to consumer protection that allowed
the crisis to boil up under regulators' noses, leaving American
families to foot the bill. Fortunately, Congress learned the lesson
that strong protections for consumers are essential to maintaining a
stable and sound economic foundation.
Upon passage of the Dodd-Frank Act, this House finally had put a cop
on the beat with exclusive authority to issue sensible rules that
protect every American. We are confident that the CFPB will continue to
work diligently with prudential regulators to make sure their rules are
consistent with the safe and sound operations of banks, ensuring that
both rulemaking and enforcement authorities reside exclusively with the
CFPB and will increase confidence in consumer markets and also ensure
certainty for businesses and financial institutions.
Returning to the broken model that existed before the crisis just
doesn't make good sense. So I would urge my colleagues to reject this
amendment, and I reserve the balance of my time.
{time} 1615
Mr. DeSANTIS. Mr. Chairman, I urge my colleagues to adopt this
amendment. The notion that somehow we are just going to put all this
trust in the CFPB and why you can't have the ability to go into court
and have the courts review some of their actions to me just doesn't cut
it. I would much rather err on the side of having protections for the
American people from government agencies that have too much power than
err on the side of giving the agency an excessive amount of power and
just hoping that they exercise that in a prudent fashion.
With that, Mr. Chairman, I ask my colleagues to vote ``yes'' on this
amendment. I applaud the other Members who have been involved in
crafting this bill.
I yield back the balance of my time.
Ms. WATERS. Mr. Chairman and Members, we have had discussions with
Members on the opposite side of the aisle about protection for our
consumers. We have heard them tell us everything about people should
have choices. They can go and hire their own lawyers, they can go into
court. They can do all of these things. The fact of the matter is,
government does have the responsibility to protect consumers. This is a
government of laws and rules that we put together for businesses. We
allow businesses to operate in certain ways, but we cannot allow them
to run roughshod over consumers.
Like I said, prior to Dodd-Frank, that is, the reform, we had nobody
looking out for consumers. We had our financial services agencies of
government saying that their real job was for safety and soundness, not
for consumer protection. So we have had news media, we have had
nonprofit agencies, we have had groups getting together trying to
address all of these abuses, all of these problems all by themselves.
Well, guess what? Now we have a cop on the block. It is your
government. This consumerfinance.gov Web site is there for all of our
citizens. This telephone number, (855) 411-2372, is there for our
consumers to call, and while you are calling the Bureau, call your
elected officials also and ask them why they don't stand up for you,
why they are on the floor of Congress advocating against your right to
have protection from all of these kinds of abuses. Enough is enough.
Americans consumers are losing dollars every day because of crooks
and schemes and thieves and on and on and on, and now you get rid of
the very agency that would protect them from all of these schemes? I am
so happy that we have reform. I am so happy that now the American
people can rely on their government to come to their aid.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Florida (Mr. DeSantis).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Ms. WATERS. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Florida will
be postponed.
Amendment No. 4 Offered by Ms. Moore
The Acting CHAIR. It is now in order to consider amendment No. 4
printed in part B of House Report 113-350.
Ms. MOORE. Mr. Chair, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Add at the end the following:
SEC. 6. FINDINGS; SENSE OF CONGRESS.
(a) Findings.--The Congress finds the following:
(1) ``The Congress acknowledges and honors the tremendous
work of the Bureau of Consumer Financial Protection in
protecting and providing relief to consumers from instances
of unfair, deceptive, and abusive practices in financial
markets.
(2) The Bureau of Consumer Financial Protection has
refunded over $3 billion to approximately 9.7 million victims
of deceptive or abusive practices in financial markets since
its inception.
(3) The Bureau of Consumer Financial Protection has
continued to engage with consumers, industry, Congress, and
other regulators to promulgate rules making U.S. financial
markets the fairest, safest, and most robust in the world.
(4) Changes to the current management, oversight, or
funding of the Bureau of Consumer Financial Protection would
undermine the mission of the Bureau.
(b) Sense of Congress.--It is the sense of the Congress
that the Congress--
(1) acknowledges the meritorious work of the Bureau of
Consumer Financial Protection; and
(2) supports the Bureau's ongoing mission by preserving the
current management, oversight, and funding structure of the
Bureau.
The Acting CHAIR. Pursuant to House Resolution 475, the gentlewoman
[[Page H2042]]
from Wisconsin (Ms. Moore) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentlewoman from Wisconsin.
Ms. MOORE. Mr. Chairman, my amendment is straightforward. It simply
provides a sense of Congress that acknowledges the tremendous work done
by the Consumer Financial Protection Bureau as it was originally
conceived in Dodd-Frank and how it has been operating to this point.
The agency, Mr. Chair, has refunded $3 billion to 9.7 million victims
of unfair, deceptive, and abusive practices in financial markets. The
Consumer Financial Protection Bureau has helped people, and fraud has
been curtailed. The message has been sent to the next generation of
financial hustlers that there is a dedicated cop on the beat in
financial markets.
The singular and dedicated mission of the Consumer Financial
Protection Bureau is to protect consumers of financial products from
schemes, and it inspires trust in our markets that attracts capital and
promotes allocations of that capital to productive, legitimate
endeavors.
My amendment affirms that the current management, oversight, and
funding source, as enshrined in Dodd-Frank, are the best way to
preserve the integrity and independence of the agency, and to ensure
that we don't return to the bad old days and bad old ways that put the
ox in the ditch by creating the 2008 financial crisis and the $700
billion bailout.
Now, H.R. 3193 openly acknowledges that it would alter and neuter the
agency's mission because H.R. 3193 would rename the Consumer Financial
Protection Bureau to the Financial Product Safety Commission, removing,
Mr. Chairman, consumers from the equation, both in name and function.
It would subject the agency's funding to protect consumers to the
unwieldy appropriations process, sequester, defunding amendments,
instead of the outside independent funding vis-a-vis these powerful
financial institutions.
Now, whether intentional or not, Republicans, Mr. Chair, have shown
their hand with the omission of consumers in H.R. 3193, and despite the
euphemistic name of the bill as written, this bill would alter the
mission and cripple the Consumer Financial Protection Bureau by
focusing on protecting financial products rather than consumers.
Whatever the intent, Mr. Chairman, consumers would be thrown under the
bus by removing the cop from the Wall Street beat.
I reserve the balance of my time.
Mr. HENSARLING. Mr. Chairman, I rise to oppose the amendment.
The Acting CHAIR. The gentleman from Texas is recognized for 5
minutes.
Mr. HENSARLING. Mr. Chairman, I find this to be a most curious
amendment from the gentlelady from Wisconsin, and we do enjoy her
participation on the committee, but it is a curious amendment because
if it is accepted, and I believe the House is going to pass it, then it
says the House is on record as saying we are going to do something but
we just didn't feel really good about it. In other words, her amendment
does nothing to the underlying bill except a sentiment that says we
shouldn't have passed it in the first place. So it is a curious,
curious amendment, Mr. Chairman.
I personally, and I don't think the House, want to be on record as
saying that the CFPB has given us the fairest, safest, and most robust
capital markets in the world. I have no doubt there are many good men
and women who work there. They have done some important work. But fair?
Fair, Mr. Chairman? An agency in the name of consumer protection that
would deny one-third of current Black and Hispanic homeowners the
opportunity to own a home? This is fair? It is just incredible.
We have brought this up several times in this debate, Mr. Chairman,
and we hear crickets chirping on the other side of the aisle. Now if a
private company did that, there would be riots in the street, but it is
okay if government has a disparate impact on minorities. I don't know
if that is fair. We have had testimony in our committee that literally
half--half--of the mortgages today, according to CoreLogic, wouldn't
qualify under the QM rule promulgated by the CFPB. I am not going to go
on record saying that is fair; that it is somehow fair that half of
Americans who otherwise would have qualified for a mortgage can no
longer have it?
To say that somehow the current oversight is adequate to this agency,
an agency that sets its own budget, an agency that is spending $145
million to renovate a $150 million building they don't even own, to
give us a tree bosque, to give us granite water features? This is
somehow a good use of the taxpayer money, a reflective carnelian
granite water table, triple the renovation rate of class A luxury space
in Washington?
If there was ever an agency, Mr. Chairman, that demands
accountability to the American people, this is it. You do not protect
consumers by taking away their rights, their freedoms, their ability to
shop in competitive and transparent markets, and you do not protect
them by taking away their income and spending it on a lavish palace for
unelected, unaccountable bureaucrats.
I reserve the balance of my time.
Ms. MOORE. Mr. Chairman, I always enjoy the chairman of the Financial
Services Committee and his lavish explanations.
I just want to clear up some of the confusion and bewilderment that
he seems to be under with regard to minority and Latin borrowers. He
has said over and over and over again, he has talked about and referred
to the Qualified Mortgage standards under the new rules. The new
standards have just taken place, and I think that minorities will find
that 95 percent of the mortgages today will fall within the Qualified
Mortgage standards.
Now having said that, I will just say that the chairman should look
at something other than the PATH Act toward restoring the GSEs, if he
is very concerned about minorities, and I would join him in that to be
able to get mortgages.
I would say that to clear up his bewilderment here, I just want to
congratulate the Consumer Financial Protection Bureau because it is a
fact that they have supported the refund of $3 billion to 9.7 million
victims of unfair practices.
I agree with him: the purpose of this bill and the reason that they
won't accept this amendment is because they don't want to go on record
that they support consumers over all of these very, very lucrative
financial products that are out there, and they want no regulation,
which is why we saw the 2008 meltdown, the no rules of the road. They
want to return to the days when there was an ability to drive the
economy over the cliff and to deceive consumers to the point that they
could and would become victims. So I can understand the chairman's
reluctance to accept this language.
Mr. Chairman, I enter into the Record our defense of our claims, and
I yield back the balance of my time.
Response to CoreLogic Analysis of Qualified Mortgage (QM) Standards,
CRL Issue Brief; February 20, 2013
The recently released CoreLogic report ``The Mortgage
Market Impact of Qualified Mortgage Regulation'' has received
a lot of attention due to its finding that 48 percent of the
mortgage market would not qualify as a ``safe loan'' under
new Qualified Mortgage (QM) guidelines.
Corelogic uses a ``waterfall'' analysis to estimate the
proportion of 2010 mortgage originations that do not meet one
or more of the QM criteria. While a waterfall approach is a
reasonable methodology for estimating the proportion of
recent originations that fall outside of QM standards, there
are problems both with the specifics of CoreLogic's model and
its assumptions about the expiration of the GSE exemption
that significantly undercut the usefulness of its estimates
of the impact of the QM rule.
Removes Loans with Credit Scores less than 640: As part of
estimating the impact of QM, CoreLogic included a restriction
on credit scores. Specifically, the waterfall analysis first
removes loans with credit scores below 640 ``because they
resemble subprime loans.'' In fact, five percent of
originations are removed solely based on this criterion. This
exclusion is not warranted because the QM guidelines do not
place any restrictions on a borrower credit score.
Assumes that borrowers who received loan products with
prohibited QM features would not be able to access QM-
eligible loan products in the future: The other waterfall
layers used to estimate the QM impact are: total debt-to-
income (DTI) ratio over 43 percent; whether the loan was
negatively amortizing, balloon or interest only; low- or no-
documentation; and loan terms of greater than 30 years. These
restrictions result in exclusions of 24 percent, 1 percent,
16 percent, and 2 percent respectively. Based on this
analysis,
[[Page H2043]]
while it might be reasonable for the report to estimate that
43 percent of 2010 originations did not meet these new QM
guidelines, it is not reasonable to infer that none of these
borrowers could have received QM loans if the rule had been
in place in 2010. While having a high DTI may be a difficult
barrier that many borrowers cannot overcome, the
disqualifying loan terms, such as negative amortization
options or terms of greater than 30- years, can easily be
avoided in most cases by simply
Re-structuring the loans into amortizing 30 year loans.
Similarly, most borrowers who received no-doc or low-doc
loans in 2010, the origination year analyzed in the report,
likely could have documented their incomes. Therefore, the
inference that none of the 19 percent of borrowers that had
disqualifying loan products could have received QM loans is
unwarranted.
Assumes the GSE exemption expires: As the report
recognizes, most of the 24 percent of loans to borrowers with
high DTIs are currently being made by GSEs or insured by FHA
and these loans automatically qualify as QM under a temporary
exemption (up to seven years). Indeed, the report
acknowledges that the impact of the QM rule on loans
currently being made would be'' minor''. Given the
uncertainties concerning GSE reform and mortgage finance that
will need to be resolved over the next seven years, it is not
at all clear that the temporary exemption will in fact end in
seven years.
____
[From the Housingwire, Oct. 28, 2013]
It's Okay To Lend Outside QM: CFPB Director Richard Cordray
(By Kerri Ann Panchuk)
It's likely mortgage bankers attending the Mortgage Bankers
Association 100th Annual Convention & Expo in Washington,
D.C, eagerly awaited the arrival of Consumer Financial
Protection Bureau Director Richard Cordray.
After all, the regulatory landscape stemming from the 2010
Dodd-Frank Act has left the lending industry shell-shocked by
not only the CFPB's new enforcement authority, but by all the
lending/servicing rules slated to take effect in January.
If bankers are worried about this new CFPB-era, Cordray
told the crowd: Don't be.
In his speech, the CFPB director basically asserted that in
many cases, non-qualified mortgages with the right
underwriting are perfectly fine even if they fall outside the
QM boundaries. This mirrors past statements in which Cordray
said he doesn't anticipate an outbreak of QM-related
litigation.
Where he stops short--or simply doesn't go--is in
explaining how lenders know at the beginning of the
origination cycle that what they've done outside QM in terms
of underwriting is sufficient enough to protect them later on
if someone were to perhaps raise an ability-to-repay claim.
Lawyers up for litigation love gray lines, but those
wanting to prevent future ability-to-repay litigation are
likely to prefer black and white rules. Cordray shows
optimism around the idea that responsible lenders are still
safe outside QM, but no specifics were given on how the CFPB
would address non-QM lending decisions down the road if a
default were to occur. Yet, he seems to be saying don't over
worry as long as standards are in place.
And when it comes to the 3% points-and-fee threshold,
Cordray has another strong viewpoint, saying ``though no data
is available to model the precise impact of the three-percent
threshold for points and fees mandated by the statute, that
threshold is more than three times the average lender
origination fees reported by Bankrate.com in its most recent
annual survey, and our rule provides an even higher threshold
for smaller loans.''
He added that the definition of a qualified mortgage
already covers most of the loans made today. And even loans
not covered by QM can still be generated as long as lenders
use ``sound underwriting standards and routinely perform well
over time,'' the director told the MBA crowd. Again, what
does `perform well over time' mean? That part is not as
clear.
As an example, Cordray told the audience, he is aware of
borrowers who may possess considerable other assets, but who
remain stifled by high debt-to-income ratios that force them
outside the QM standards. As long as lenders ensure the best
underwriting standards, they should be fine, Cordray said.
``Lenders that haye long upheld such standards have little
to fear from the ability-to-repay rule; the strong
performance of their loans over time demonstrates the care
they have taken in underwriting to ensure that borrowers have
the ability to repay,'' Cordray added.
``Nothing about their traditional lending model has
changed, and they should continue to offer the same kinds of
mortgages to borrowers whom they evaluate as posing
reasonable credit risk--whether or not they meet the criteria
to be classified as qualified mortgages.''
Cordray further noted that lenders who refuse to lend
outside QM will be at no greater risk, absent other factors,
of facing fair lending allegations.
The CFPB director once again cited data from Mark Zandi,
chief economist for Moody's Analytics, noting that 95% of the
mortgages made today fall within the qualified mortgage
standard.
``Some, such as CoreLogic, have put out much lower figures,
but by their own admission, those figures were not intended
to take account of the expanded definition of QM that will
actually take effect in January but instead were offered as
projections of a distant future when the temporary expansion
expires,'' Cordray explained.
{time} 1630
Mr. HENSARLING. Mr. Chairman, I would just say to my friends on the
other side of the aisle--and the gentlelady from Wisconsin, I would
draw her attention to the Federal Reserve bulletin, November 2013,
Volume 99, No. 4, page 37, that clearly shows, again, according to the
Federal Reserve, that 34 percent of Blacks and 32 percent of Hispanics
would not meet the new QM standard based upon the 43 percent debt-to-
income requirement.
Now, this is Federal Reserve data. If the gentlelady or any other
Member on the other side of the aisle wishes to refute this data from
the Federal Reserve, they are certainly free to do so on their time.
But again, I am not going to go on record saying this is fair. I
haven't heard anybody rebut what CoreLogic has said, that when fully
implemented, half of today's mortgages would not qualify under the QM
rule. This is not fair.
Mr. Chairman, somebody has to protect consumers from the CFPB.
Consumers, yes, they have to be protected from Wall Street, but they
have to be protected from Washington as well.
You do not protect consumers by having unelected, unaccountable
bureaucrats in Washington whose average salary is over $175,000--salary
and benefits--to somehow say: I am from Washington. I am smarter than
you. I will decide whether or not you get a mortgage.
It is arrogant; it is unfair; it is abusive. It must stop. We should
reject the gentlelady's amendment, and we should adopt the underlying
legislation.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from Wisconsin (Ms. Moore).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Ms. MOORE. Mr. Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from Wisconsin
will be postponed.
Mr. HENSARLING. Mr. Chairman, I move that the Committee do now rise.
The motion was agreed to.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Holding) having assumed the chair, Mr. Marchant, Acting Chair of the
Committee of the Whole House on the state of the Union, reported that
that Committee, having had under consideration the bill (H.R. 3193) to
amend the Consumer Financial Protection Act of 2010 to strengthen the
review authority of the Financial Stability Oversight Council of
regulations issued by the Bureau of Consumer Financial Protection, and
for other purposes, had come to no resolution thereon.
____________________