[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.

                                  
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