[House Report 112-89]
[From the U.S. Government Publishing Office]
112th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 112-89
======================================================================
CONSUMER FINANCIAL PROTECTION SAFETY AND SOUNDNESS IMPROVEMENT ACT OF
2011
_______
May 25, 2011.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Bachus, from the Committee on Financial Services,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 1315]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 1315) to amend the Dodd-Frank Wall Street Reform
and Consumer Protection Act to strengthen the review authority
of the Financial Stability Oversight Council of regulations
issued by the Bureau of Consumer Financial Protection, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Consumer Financial Protection Safety
and Soundness Improvement Act of 2011''.
SEC. 2. COUNCIL VOTING PROCEDURE.
Section 1023(c)(3)(A) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act is amended--
(1) by striking ``\2/3\'' and inserting ``a majority''; and
(2) by inserting before the period the following: ``,
excluding the Director of the Bureau''.
SEC. 3. REVIEW AUTHORITY OF THE COUNCIL.
Section 1023 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act 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);
(D) by redesignating paragraphs (6), (7), and (8) as
paragraphs (5), (6), and (7), respectively; and
(E) by adding at the end the following new paragraph:
``(8) Public meetings.--Any time the Council meets pursuant
to this section to decide whether to issue a stay of, or set
aside, any regulation, every portion of such meeting shall be
open to public observation.''.
Purpose and Summary
H.R. 1315, the Consumer Financial Protection Safety and
Soundness Improvement Act of 2011, amends Section 1023 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act) (P.L. 111-203) to streamline the Financial
Stability Oversight Council's (FSOC) review and oversight of
Consumer Financial Protection Bureau (CFPB) rules and
regulations that may undermine the safety and soundness of U.S.
financial institutions. The bill makes four major changes: (1)
it lowers the threshold required to set aside regulations from
a two-thirds vote of the FSOC's voting membership to a simple
majority, excluding the CFPB; (2) it clarifies that the FSOC
must set aside any CFPB regulation that is inconsistent with
the safe and sound operations of U.S. financial institutions;
(3) it eliminates the 45-day time limit for the FSOC to review
and vote on regulations; and (4) it requires that all FSOC
meetings be open to the public whenever it decides to stay or
set aside a CFPB regulation.
Background and Need for Legislation
Rep. Sean Duffy introduced H.R. 1315 to enhance FSOC
oversight and review of regulations proposed by the CFPB. Title
I of the Dodd-Frank Act establishes the FSOC, and Section
112(a) charges the FSOC with identifying ``risks to the
financial stability of the United States that could arise from
the material financial distress or failure, or ongoing
activities, of large, interconnected bank holding companies or
nonbank financial companies, or that could arise outside the
financial services marketplace.'' Ten voting members and five
non-voting members comprise the FSOC. The ten voting members
are the heads of nine federal financial regulatory agencies,
including the CFPB, and an independent member with insurance
expertise. In addition to the CFPB, the other agencies
represented are the Department of the Treasury, the Federal
Reserve, the Office of the Comptroller of the Currency (OCC),
the Securities and Exchange Commission (SEC), the Federal
Deposit Insurance Corporation (FDIC), the Commodity Futures
Trading Commission (CFTC), the Federal Housing Finance Agency
(FHFA), and the National Credit Union Administration (NCUA).
Section 1023 of the Dodd-Frank Act allows the FSOC to
review, stay, and block CFPB regulations if two-thirds of the
FSOC membership ``decides . . . that the 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.'' The FSOC chair may stay the
effectiveness of a regulation at the request of a single FSOC
member for 90 days. If the FSOC chair does not stay the rule,
the FSOC must vote within 45 days of the date the petition is
filed. If the FSOC stays the rule, the vote must be taken
before the stay elapses. If a vote is not taken within these
time frames, the petition is deemed to have been dismissed.
H.R. 1315 reduces the vote required to set aside CFPB
regulations from two-thirds of the FSOC's voting membership to
a simple majority, excluding the Director of the CFPB. Under
the Dodd-Frank Act, even if six voting members of the FSOC
believe that a CFPB rule could undermine the safety and
soundness of U.S. financial institutions, if just two others
side with the CFPB, the rule would become effective. Given that
the safety and soundness of American financial institutions are
at risk, a majority vote makes more sense: it lets the CFPB set
rules that protect consumers; it sets an appropriate threshold
for overturning a rule; and it also allows the FSOC to reject
misguided rules that could destabilize U.S. financial
institutions.
The bill also clarifies that the FSOC must set aside any
CFPB regulation that is inconsistent with the safe and sound
operations of U.S. financial institutions. The current standard
in Section 1023 for overturning a CFPB rule is extremely high,
as it requires a proposed CFPB rule to ``put the safety and
soundness of the United States banking system or the stability
of the financial system of the United States at risk'' in order
to be overturned. Accordingly, a rule that severely threatens
the viability of smaller financial institutions but does not
put the entire financial system at risk would not meet the
standard. The change proposed in H.R. 1315 ensures that a CFPB
rule does not impair the safety and soundness of a U.S.
financial institution, regardless of its size.
H.R. 1315 also removes any time restrictions for FSOC
reviews. To give the FSOC the time necessary to fully consider
the consequences of CFPB regulations on the safe and sound
operation of the banking system--which may not be immediately
apparent--the bill removes the time limits associated with this
process.
Hearings
The Subcommittee on Financial Institutions and Consumer
Credit held a hearing on March 16, 2011 entitled ``Oversight of
the Consumer Financial Protection Bureau.'' There was one
witness:
Ms. Elizabeth Warren, Special Advisor to the
Secretary of the Treasury for the Consumer Financial Protection
Bureau, Department of the Treasury
The Subcommittee on Financial Institutions and Consumer
Credit held a hearing on April 6, 2011 entitled, ``Legislative
Proposals to Improve the Structure of the Consumer Financial
Protection Bureau.'' The following witnesses testified:
Ms. Leslie R. Andersen, President and Chief
Executive Officer, Bank of Bennington on behalf of the American
Bankers Association
Ms. Lynette W. Smith, President and Chief
Executive Officer, Washington Gas Light FCU on behalf of the
National Association of Federal Credit Unions
Mr. Jess Sharp, Executive Director, Center for
Capital Markets Competitiveness, U.S. Chamber of Commerce
Mr. Hilary Shelton, Director, NAACP Washington
Bureau and Senior VP for Advocacy and Policy, NAACP
Mr. Noah H. Wilcox, President and Chief Executive
Officer, Grand Rapids State Bank on behalf of the Independent
Community Bankers of America
Mr. Rod Staatz, President and Chief Executive
Officer, SECU of Maryland on behalf of the Credit Union
National Association
Mr. Richard Hunt, President, Consumer Bankers
Association
Prof. Adam J. Levitin, Georgetown University Law
Center
Committee Consideration
The Subcommittee on Financial Institutions and Consumer
Credit met in open session on May 4, 2011 and ordered H.R.
1315, Consumer Financial Protection Safety and Soundness
Improvement Act of 2011, as amended, favorably reported to the
Full Committee by a record vote of 13 yeas and 7 nays (Record
vote no. FI-7).
The Committee on Financial Services met in open session on
May 12, 2011 and ordered H.R. 1315, the Consumer Financial
Protection Safety and Soundness Improvement Act of 2011, as
amended, favorably reported to the House by a record vote of 35
yeas and 22 nays (Record vote no. FC-36).
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. A
motion by Chairman Bachus to report the bill, as amended, to
the House with a favorable recommendation was agreed to by a
record vote of 35 yeas and 22 nays (Record vote no. FC-36). The
names of Members voting for and against follow:
RECORD VOTE NO. FC-36
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus..................... X ........ ......... Mr. Frank (MA)... ........ X .........
Mr. Hensarling................. X ........ ......... Ms. Waters....... ........ X .........
Mr. King (NY).................. X ........ ......... Mrs. Maloney..... ........ X .........
Mr. Royce...................... X ........ ......... Mr. Gutierrez.... ........ ........ .........
Mr. Lucas...................... X ........ ......... Ms. Velazquez.... ........ X .........
Mr. Paul....................... ........ ........ ......... Mr. Watt......... ........ X .........
Mr. Manzullo................... X ........ ......... Mr. Ackerman..... ........ X .........
Mr. Jones...................... X ........ ......... Mr. Sherman...... ........ X .........
Mrs. Biggert................... X ........ ......... Mr. Meeks........ ........ X .........
Mr. Gary G. Miller (CA)........ X ........ ......... Mr. Capuano...... ........ X .........
Mrs. Capito.................... X ........ ......... Mr. Hinojosa..... ........ X .........
Mr. Garrett.................... X ........ ......... Mr. Clay......... ........ X .........
Mr. Neugebauer................. X ........ ......... Mrs. McCarthy ........ ........ .........
(NY).
Mr. McHenry.................... X ........ ......... Mr. Baca......... ........ X .........
Mr. Campbell................... X ........ ......... Mr. Lynch........ ........ X .........
Mrs. Bachmann.................. X ........ ......... Mr. Miller (NC).. ........ X .........
Mr. McCotter................... X ........ ......... Mr. David Scott ........ X .........
(GA).
Mr. McCarthy (CA).............. X ........ ......... Mr. Al Green (TX) ........ X .........
Mr. Pearce..................... X ........ ......... Mr. Cleaver...... ........ X .........
Mr. Posey...................... X ........ ......... Ms. Moore........ ........ X .........
Mr. Fitzpatrick................ X ........ ......... Mr. Ellison...... ........ ........ .........
Mr. Westmoreland............... X ........ ......... Mr. Perlmutter... X ........ .........
Mr. Luetkemeyer................ X ........ ......... Mr. Donnelly..... ........ X .........
Mr. Huizenga................... X ........ ......... Mr. Carson....... X ........ .........
Mr. Duffy...................... X ........ ......... Mr. Himes........ ........ X .........
Ms. Hayworth................... X ........ ......... Mr. Peters....... ........ X .........
Mr. Renacci.................... X ........ ......... Mr. Carney....... ........ X .........
Mr. Hurt....................... X ........ .........
Mr. Dold....................... X ........ .........
Mr. Schweikert................. X ........ .........
Mr. Grimm...................... X ........ .........
Mr. Canseco.................... X ........ .........
Mr. Stivers.................... X ........ .........
Mr. Fincher.................... X ........ .........
----------------------------------------------------------------------------------------------------------------
During consideration of H.R. 1315, the following amendments
and motion were considered:
1. An amendment offered by Ms. Waters, no. 1, to provide
that the FSOC can overturn a regulation with a 2/3 vote if a
majority of the FSOC determines that the primary purpose of a
regulation is to protect members of the armed services, was not
agreed to by a record vote of 25 yeas and 32 nays (Record vote
no. FC-33).
RECORD VOTE NO. FC-33
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus..................... ........ X ......... Mr. Frank (MA)... X ........ .........
Mr. Hensarling................. ........ X ......... Ms. Waters....... X ........ .........
Mr. King (NY).................. ........ X ......... Mrs. Maloney..... X ........ .........
Mr. Royce...................... ........ X ......... Mr. Gutierrez.... ........ ........ .........
Mr. Lucas...................... ........ X ......... Ms. Velazquez.... X ........ .........
Mr. Paul....................... ........ ........ ......... Mr. Watt......... X ........ .........
Mr. Manzullo................... ........ X ......... Mr. Ackerman..... X ........ .........
Mr. Jones...................... X ........ ......... Mr. Sherman...... X ........ .........
Mrs. Biggert................... ........ X ......... Mr. Meeks........ X ........ .........
Mr. Gary G. Miller (CA)........ ........ X ......... Mr. Capuano...... X ........ .........
Mrs. Capito.................... ........ X ......... Mr. Hinojosa..... X ........ .........
Mr. Garrett.................... ........ X ......... Mr. Clay......... X ........ .........
Mr. Neugebauer................. ........ X ......... Mrs. McCarthy ........ ........ .........
(NY).
Mr. McHenry.................... ........ X ......... Mr. Baca......... X ........ .........
Mr. Campbell................... ........ X ......... Mr. Lynch........ X ........ .........
Mrs. Bachmann.................. ........ X ......... Mr. Miller (NC).. X ........ .........
Mr. McCotter................... ........ X ......... Mr. David Scott X ........ .........
(GA).
Mr. McCarthy (CA).............. ........ X ......... Mr. Al Green (TX) X ........ .........
Mr. Pearce..................... ........ X ......... Mr. Cleaver...... X ........ .........
Mr. Posey...................... ........ X ......... Ms. Moore........ X ........ .........
Mr. Fitzpatrick................ ........ X ......... Mr. Ellison...... ........ ........ .........
Mr. Westmoreland............... ........ X ......... Mr. Perlmutter... X ........ .........
Mr. Luetkemeyer................ ........ X ......... Mr. Donnelly..... X ........ .........
Mr. Huizenga................... ........ X ......... Mr. Carson....... X ........ .........
Mr. Duffy...................... ........ X ......... Mr. Himes........ X ........ .........
Ms. Hayworth................... ........ X ......... Mr. Peters....... X ........ .........
Mr. Renacci.................... ........ X ......... Mr. Carney....... X ........ .........
Mr. Hurt....................... ........ X .........
Mr. Dold....................... ........ X .........
Mr. Schweikert................. ........ X .........
Mr. Grimm...................... ........ X .........
Mr. Canseco.................... ........ X .........
Mr. Stivers.................... ........ X .........
Mr. Fincher.................... ........ X .........
----------------------------------------------------------------------------------------------------------------
2. A motion offered by Mr. Hensarling, to table Mr.
Miller's appeal of the ruling of the Chair, was agreed to by a
record vote of 10 yeas and 7 nays (Record vote no. FC-25).
RECORD VOTE NO. FC-25
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus..................... X ........ ......... Mr. Frank (MA)... ........ X .........
Mr. Hensarling................. X ........ ......... Ms. Waters....... ........ X .........
Mr. King (NY).................. ........ ........ ......... Mrs. Maloney..... ........ X .........
Mr. Royce...................... ........ ........ ......... Mr. Gutierrez.... ........ ........ .........
Mr. Lucas...................... ........ ........ ......... Ms. Velazquez.... ........ ........ .........
Mr. Paul....................... ........ ........ ......... Mr. Watt......... ........ X .........
Mr. Manzullo................... ........ ........ ......... Mr. Ackerman..... ........ ........ .........
Mr. Jones...................... ........ ........ ......... Mr. Sherman...... ........ X .........
Mrs. Biggert................... X ........ ......... Mr. Meeks........ ........ ........ .........
Mr. Gary G. Miller (CA)........ ........ ........ ......... Mr. Capuano...... ........ ........ .........
Mrs. Capito.................... ........ ........ ......... Mr. Hinojosa..... ........ ........ .........
Mr. Garrett.................... X ........ ......... Mr. Clay......... ........ ........ .........
Mr. Neugebauer................. X ........ ......... Mrs. McCarthy ........ ........ .........
(NY).
Mr. McHenry.................... ........ ........ ......... Mr. Baca......... ........ ........ .........
Mr. Campbell................... ........ ........ ......... Mr. Lynch........ ........ ........ .........
Mrs. Bachmann.................. ........ ........ ......... Mr. Miller (NC).. ........ X .........
Mr. McCotter................... X ........ ......... Mr. David Scott ........ ........ .........
(GA).
Mr. McCarthy (CA).............. ........ ........ ......... Mr. Al Green (TX) ........ ........ .........
Mr. Pearce..................... ........ ........ ......... Mr. Cleaver...... ........ ........ .........
Mr. Posey...................... ........ ........ ......... Ms. Moore........ ........ ........ .........
Mr. Fitzpatrick................ ........ ........ ......... Mr. Ellison...... ........ X .........
Mr. Westmoreland............... ........ ........ ......... Mr. Perlmutter... ........ ........ .........
Mr. Luetkemeyer................ ........ ........ ......... Mr. Donnelly..... ........ ........ .........
Mr. Huizenga................... ........ ........ ......... Mr. Carson....... ........ ........ .........
Mr. Duffy...................... X ........ ......... Mr. Himes........ ........ ........ .........
Ms. Hayworth................... ........ ........ ......... Mr. Peters....... ........ ........ .........
Mr. Renacci.................... ........ ........ ......... Mr. Carney....... ........ ........ .........
Mr. Hurt....................... X ........ .........
Mr. Dold....................... X ........ .........
Mr. Schweikert................. X ........ .........
Mr. Grimm...................... ........ ........ .........
Mr. Canseco.................... ........ ........ .........
Mr. Stivers.................... ........ ........ .........
Mr. Fincher.................... ........ ........ .........
----------------------------------------------------------------------------------------------------------------
3. An amendment offered by Mr. Miller of NC, no. 4, to
require that when an insured depository institution submits
comments to a regulator and when the regulator determines that
the rule would affect the safety and soundness of the
institution, the regulator shall conduct aseries of
investigations into the institution's management and business decisions
to determine whether any alleged safety and soundness concerns are
actually attributable to the proposed rule or to other factors, and to
require all regulators to consider the financial safety and soundness
of the consumers who will be affected by the proposed rule when
determining how to proceed, was not agreed to by a record vote of 24
yeas and 33 nays (Record vote no. FC-34).
RECORD VOTE NO. FC-34
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus..................... ........ X ......... Mr. Frank (MA)... X ........ .........
Mr. Hensarling................. ........ X ......... Ms. Waters....... X ........ .........
Mr. King (NY).................. ........ X ......... Mrs. Maloney..... X ........ .........
Mr. Royce...................... ........ X ......... Mr. Gutierrez.... ........ ........ .........
Mr. Lucas...................... ........ X ......... Ms. Velazquez.... X
Mr. Paul....................... ........ ........ ......... Mr. Watt......... X ........ .........
Mr. Manzullo................... ........ X ......... Mr. Ackerman..... X ........ .........
Mr. Jones...................... ........ X ......... Mr. Sherman...... X ........ .........
Mrs. Biggert................... ........ X ......... Mr. Meeks........ X ........ .........
Mr. Gary G. Miller (CA)........ ........ X ......... Mr. Capuano...... X ........ .........
Mrs. Capito.................... ........ X ......... Mr. Hinojosa..... X ........ .........
Mr. Garrett.................... ........ X ......... Mr. Clay......... X ........ .........
Mr. Neugebauer................. ........ X ......... Mrs. McCarthy ........ ........ .........
(NY).
Mr. McHenry.................... ........ X ......... Mr. Baca......... X ........ .........
Mr. Campbell................... ........ X ......... Mr. Lynch........ X ........ .........
Mrs. Bachmann.................. ........ X ......... Mr. Miller (NC).. X ........ .........
Mr. McCotter................... ........ X ......... Mr. David Scott X ........ .........
(GA).
Mr. McCarthy (CA).............. ........ X ......... Mr. Al Green (TX) X ........ .........
Mr. Pearce..................... ........ X ......... Mr. Cleaver...... X ........ .........
Mr. Posey...................... ........ X ......... Ms. Moore........ X ........ .........
Mr. Fitzpatrick................ ........ X ......... Mr. Ellison...... ........ ........ .........
Mr. Westmoreland............... ........ X ......... Mr. Perlmutter... X ........ .........
Mr. Luetkemeyer................ ........ X ......... Mr. Donnelly..... X ........ .........
Mr. Huizenga................... ........ X ......... Mr. Carson....... X ........ .........
Mr. Duffy...................... ........ X ......... Mr. Himes........ X ........ .........
Ms. Hayworth................... ........ X ......... Mr. Peters....... X ........ .........
Mr. Renacci.................... ........ X ......... Mr. Carney....... X ........ .........
Mr. Hurt....................... ........ X .........
Mr. Dold....................... ........ X .........
Mr. Schweikert................. ........ X .........
Mr. Grimm...................... ........ X .........
Mr. Canseco.................... ........ X .........
Mr. Stivers.................... ........ X .........
Mr. Fincher.................... ........ X .........
----------------------------------------------------------------------------------------------------------------
4. An amendment offered by Ms. Waters, no. 5, to provide
that the FSOC can overturn a regulation with a 2/3 vote if a
majority of the FSOC determines that the primary purpose of a
regulation is to protect older Americans, was not agreed to by
a record vote of 25 yeas and 32 nays (Record vote no. FC-35).
RECORD VOTE NO. FC-35
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus..................... ........ X ......... Mr. Frank (MA)... X ........ .........
Mr. Hensarling................. ........ X ......... Ms. Waters....... X ........ .........
Mr. King (NY).................. ........ X ......... Mrs. Maloney..... X ........ .........
Mr. Royce...................... ........ X ......... Mr. Gutierrez.... ........ ........ .........
Mr. Lucas...................... ........ X ......... Ms. Velazquez.... X
Mr. Paul....................... ........ ........ ......... Mr. Watt......... X ........ .........
Mr. Manzullo................... ........ X ......... Mr. Ackerman..... X ........ .........
Mr. Jones...................... X ........ ......... Mr. Sherman...... X ........ .........
Mrs. Biggert................... ........ X ......... Mr. Meeks........ X ........ .........
Mr. Gary G. Miller (CA)........ ........ X ......... Mr. Capuano...... X ........ .........
Mrs. Capito.................... ........ X ......... Mr. Hinojosa..... X ........ .........
Mr. Garrett.................... ........ X ......... Mr. Clay......... X ........ .........
Mr. Neugebauer................. ........ X ......... Mrs. McCarthy ........ ........ .........
(NY).
Mr. McHenry.................... ........ X ......... Mr. Baca......... X ........ .........
Mr. Campbell................... ........ X ......... Mr. Lynch........ X ........ .........
Mrs. Bachmann.................. ........ X ......... Mr. Miller (NC).. X ........ .........
Mr. McCotter................... ........ X ......... Mr. David Scott X ........ .........
(GA).
Mr. McCarthy (CA).............. ........ X ......... Mr. Al Green (TX) X ........ .........
Mr. Pearce..................... ........ X ......... Mr. Cleaver...... X ........ .........
Mr. Posey...................... ........ X ......... Ms. Moore........ X ........ .........
Mr. Fitzpatrick................ ........ X ......... Mr. Ellison...... ........ ........ .........
Mr. Westmoreland............... ........ X ......... Mr. Perlmutter... X ........ .........
Mr. Luetkemeyer................ ........ X ......... Mr. Donnelly..... X ........ .........
Mr. Huizenga................... ........ X ......... Mr. Carson....... X ........ .........
Mr. Duffy...................... ........ X ......... Mr. Himes........ X ........ .........
Ms. Hayworth................... ........ X ......... Mr. Peters....... X ........ .........
Mr. Renacci.................... ........ X ......... Mr. Carney....... X ........ .........
Mr. Hurt....................... ........ X .........
Mr. Dold....................... ........ X .........
Mr. Schweikert................. ........ X .........
Mr. Grimm...................... ........ X .........
Mr. Canseco.................... ........ X .........
Mr. Stivers.................... ........ X .........
Mr. Fincher.................... ........ X .........
----------------------------------------------------------------------------------------------------------------
The following amendments and motion were also considered by
the Committee:
1. An amendment offered by Mr. Miller of North Carolina,
no. 2, to require that when an insured depository institution
submits a comment to the CFPB it shall also provide appropriate
Federal banking agencies with a report stating how the
institution expects the proposed rule to affect the safety and
soundness of the institution and a report detailing how a
proposed rule affects the profitability of the institution, was
not germane.
2. An amendment offered by Mrs. Maloney, no. 3, to prevent
the FSOC from considering profitability when determining if a
proposed rule affects the safe and sound operations of the
financial institution, was offered and withdrawn.
3. A motion offered by Mrs. Biggert, to move the previous
question on H.R. 1315 was agreed to by voice vote.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has held a hearing and
made findings that are reflected in this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:
The purpose of H.R. 1315 is to enhance FSOC oversight and
review of regulations proposed by the CFPB. The bill achieves
its purpose by making three changes to the Dodd-Frank Act.
Firstly, H.R. 1315 changes the voting scheme required to set
aside CFPB regulations from two-thirds of the FSOC's voting
membership to a simple majority, excluding the Director of the
CFPB. Secondly, the bill clarifies that the FSOC must set aside
any CFPB regulation that is inconsistent with the safe and
sound operations of U.S. financial institutions. Thirdly, H.R.
1315 removes any time restrictions imposed on the FSOC in
reviewing CFPB regulations on the safe and sound operation of
the banking system.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimates
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
May 20, 2011.
Hon. Spencer Bachus,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1315, the Consumer
Financial Protection Safety and Soundness Improvement Act of
2011.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susan Willie.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
H.R. 1315--Consumer Financial Protection Safety and Soundness
Improvement Act of 2011
H.R. 1315 would amend the statute that authorizes the
Financial Stability Oversight Council (FSOC) to delay
implementation or set aside final regulations developed by the
Consumer Financial Protection Bureau (CFPB). The FSOC may,
under current law, stay the effective date of a regulation or
set aside a regulation developed by the CFPB upon a vote of
two-thirds of the members affirming that the regulation would
put the safety and soundness of the United States banking
system or the stability of the United States financial system
at risk. H.R. 1315 would require the FSOC to take such action
if a majority of the members affirm that a regulation is
inconsistent with the safe and sound operations of domestic
financial institutions.
Based on information from the Treasury, CBO estimates that
enacting H.R. 1315 would not significantly affect direct
spending and would not affect revenues. Because enacting H.R.
1315 could affect direct spending, pay-as-you-go procedures
apply.
CBO expects that the number of regulations that could come
to a vote by the FSOC would not change significantly as a
result of the bill; further, changing the margin of votes to
approve a stay or set aside a regulation would probably not
have a significant effect on the cost of operating the FSOC or
the CFPB.
H.R. 1315 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Susan Willie.
The estimate was approved by Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
H.R. 1315 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This Act may be cited as the ``Consumer Financial
Protection Safety and Soundness Improvement Act of 2011.''
Section 2. Council voting procedure
Section Two would change the vote required to set aside a
CFPB regulation from two-thirds of the FSOC membership to a
simple majority, excluding the Director of the CFPB.
Section 3. Review authority of the Council
Section Three would clarify that the FSOC must set aside
any CFPB regulation that is inconsistent with the safe and
sound operations of U.S. financial institutions, rather than
merely allowing the FSOC to review, stay or block CFPB
regulations or provisions that would ``put thesafety and
soundness of the United States banking system or the stability of the
financial system at risk.''
Further, Section Three amends the time limits for the FSOC
to review and vote on regulations. Section 1023 of the Dodd-
Frank Act requires that the FSOC vote within the later of the
following: (1) 45 days following the date of filing the
petition, unless a stay is issued; or (2) the expiration of a
stay issued by the FSOC. If a vote is not taken within these
time limits, the petition is deemed to have been dismissed.
Section Three removes these time limits.
Section Three also requires that all FSOC meetings be open
to the public whenever it decides to stay or set aside a CFPB
regulation.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
* * * * * * *
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION
* * * * * * *
Subtitle B--General Powers of the Bureau
* * * * * * *
SEC. 1023. REVIEW OF BUREAU REGULATIONS.
(a) Review of Bureau Regulations.--On the petition of a
member agency of the Council, the Council [may] shall set aside
a final regulation prescribed by the Bureau, or any provision
thereof, if the Council decides, in accordance with subsection
(c), that the [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]
regulation which is the subject of the petition is inconsistent
with the safe and sound operations of United States financial
institutions.
* * * * * * *
(c) Stays and Set Asides.--
(1) * * *
* * * * * * *
(3) Vote.--
(A) In general.--The decision to issue a stay
of, or set aside, any regulation under this
section shall be made only with the affirmative
vote in accordance with subparagraph (B) of
[\2/3\] a majority of the members of the
Council then serving, excluding the Director of
the Bureau.
(B) Authorization to vote.--A member of the
Council may vote to stay the effectiveness of,
or set aside, a final regulation prescribed by
the Bureau only if the agency or department
represented by that member has--
(i) * * *
(ii) made an official determination,
at a public meeting where applicable,
that the regulation which is the
subject of the petition [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] is inconsistent with
the safe and sound operations of United
States financial institutions.
(4) Decisions to set aside.--
(A) * * *
[(B) Timely action required.--The Council may
not issue a decision to set aside a regulation,
or provision thereof, which is the subject of a
petition under this section after the
expiration of the later of--
[(i) 45 days following the date of
filing of the petition, unless a stay
is issued under paragraph (1); or
[(ii) the expiration of a stay issued
by the Council under this section.]
[(C)] (B) Separate authority.--The issuance
of a stay under this section does not affect
the authority of the Council to set aside a
regulation.
[(5) Dismissal due to inaction.--A petition under
this section shall be deemed dismissed if the Council
has not issued a decision to set aside a regulation, or
provision thereof, within the period for timely action
under paragraph (4)(B).]
[(6)] (5) Publication of decision.--Any decision
under this subsection to issue a stay of, or set aside,
a regulation or provision thereof shall be published by
the Council in the Federal Register as soon as
practicable after the decision is made, with an
explanation of the reasons for the decision.
[(7)] (6) Rulemaking procedures inapplicable.--The
notice and comment procedures under section 553 of
title 5, United States Code, shall not apply to any
decision under this section of the Council to issue a
stay of, or set aside, a regulation.
[(8)] (7) Judicial review of decisions by the
council.--A decision by the Council to set aside a
regulation prescribed by the Bureau, or provision
thereof, shall be subject to review under chapter 7 of
title 5, United States Code.
(8) Public meetings.--Any time the Council meets
pursuant to this section to decide whether to issue a
stay of, or set aside, any regulation, every portion of
such meeting shall be open to public observation.
* * * * * * *
MINORITY VIEWS
The Consumer Financial Protection Bureau (CFPB) is a very
important part of the Wall Street Reform and Consumer
Protection Act, as the title of the bill makes clear. Until
passage of that Act, consumer protection in financial matters
was in the hands of regulators who consistently treated
consumer protection as a second class concern. Creating an
independent bureau was intended to ensure that consumer
interests are fully considered on the merits and not relegated
to an afterthought.
H.R. 1315 would reverse this by restoring the prudential
regulators' authority over consumer protection by providing
that the Financial Stability Oversight Council (FSOC) could
overrule, by majority vote, a CFPB regulation on any policy
ground it deems appropriate. This would take away the very
independence of the CFPB that the law intended to establish.
Barney Frank.
Luis V. Gutierrez.
Gary C. Peters.
Andre Carson.
Wm. Lacy Clay.
Emanuel Cleaver.
Gary L. Ackerman.
Carolyn McCarthy.
Joe Baca.
Joe Donnelly.
Brad Sherman.
Michael E. Capuano.
Melvin L. Watt.
Maxine Waters.
Keith Ellison.
Carolyn B. Maloney.
Brad Miller.
Gregory W. Meeks.
Al Green.
Stephen F. Lynch.
Ruben Hinojosa.