[House Report 115-668]
[From the U.S. Government Publishing Office]


115th Congress   }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                     {      115-668

======================================================================



 
          BUSINESS OF INSURANCE REGULATORY REFORM ACT OF 2017

                                _______
                                

  May 10, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 3746]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 3746) to amend the Consumer Financial Protection 
Act of 2010 to clarify the authority of the Bureau of Consumer 
Financial Protection with respect to persons regulated by a 
State insurance regulator, and for other purposes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                          Purpose and Summary

    Introduced by Representative Sean Duffy on September 12, 
2017, H.R. 3746, the ``Business of Insurance Regulatory Reform 
Act of 2017'' amends the Consumer Financial Protection Act of 
2010, which is Title X of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act, to revise the authority of the Bureau 
of Consumer Financial Protection (Bureau) over activities 
regulated by a state insurance regulator. The Bureau may not 
enforce the provisions of Title X of the Dodd-Frank Act against 
any person regulated by a state insurance regulator who offers 
a consumer financial product or service, to the extent that 
person is engaged in the business of insurance. If a person 
engaged in the business of insurance is regulated by a state 
insurance regulator but otherwise subject to Title X of the 
Dodd-Frank Act, the Bureau must construe its authority 
narrowly.

                  Background and Need for Legislation

    Title X of the Dodd-Frank Act authorizes the Bureau to 
regulate consumer financial products and services, such as 
extending credit, loan servicing, debt collection, deposit 
taking, providing payment instruments, check cashing, consumer 
reporting, etc. However, Section 1027 of the Dodd-Frank 
excludes several enumerated products and services from the 
Bureau's jurisdiction, including the business of insurance as 
conducted by any entity regulated by a state insurance 
regulator.\1\
---------------------------------------------------------------------------
    \1\Dodd-Frank Act Sec. 1027(f).
---------------------------------------------------------------------------
    The Dodd-Frank Act defines the ``business of insurance'' as 
practices that include:

          the writing of insurance or the reinsuring of risks 
        by an insurer, including all acts necessary to such 
        writing or reinsuring and the activities relating to 
        the writing of insurance or the reinsuring of risks 
        conducted by persons who act as, or are, officers, 
        directors, agents, or employees of insurers or who are 
        other persons authorized to act on behalf of such 
        persons.\2\
---------------------------------------------------------------------------
    \2\12 U.S.C. Sec. 5481(3).

    In addition, the Bureau is prohibited from regulating the 
business of insurance by the existence of the McCarran Ferguson 
Act,\3\ which exempts the business of insurance from federal 
regulation.
---------------------------------------------------------------------------
    \3\15 U.S.C. Sec. Sec. 1011-1015.
---------------------------------------------------------------------------
    Despite this explicit prohibition, the Bureau, under the 
leadership of its former Director, demonstrated an interest in 
insurance products and has pushed the boundaries of its own 
authority by regulating products that would otherwise fall 
under the purview of state insurance regulators. In 2013, the 
Bureau issued an enforcement action against a bank and its 
service provider for allegedly deceptive sales of ``add-on'' 
GAP insurance products by the bank's service provider.\4\ 
According to the consent order, the Bureau found Unfair 
Deceptive and Abusive Acts or Practices violations for:
---------------------------------------------------------------------------
    \4\https://www.consumerfinance.gov/policy-compliance/enforcement/
actions/dealers-financial-services-llc/.

          ``(a) deceptively marketing the prices of an add-on 
        vehicle service contract and an add-on GAP insurance 
        product, and (b) deceptively marketing the scope of the 
        coverage of a vehicle service contract.\5\
---------------------------------------------------------------------------
    \5\http://files.consumerfinance.gov/f/201306_cfpb_consent-order-
004.pdf.

Despite the Dodd-Frank Act specific restrictions on the 
Bureau's authority over the sale of optional insurance 
products, which are not required in order for a consumer to 
obtain a financial product or service, by a bank or service 
provider.
    As a federal regulatory agency, the law limits the Bureau's 
regulatory authorities, and therefore, because every state has 
a state insurance regulator to govern the sale of insurance, 
and the Dodd-Frank Act only discusses the business of insurance 
in order to exempt it from the Bureau's purview, it is clear 
that Congressional intent was to prohibit the Bureau's 
regulation of the business of insurance, but explicitly sought 
to exclude the Bureau from doing so. H.R. 3746 would clarify 
that state insurance regulators hold primary jurisdiction to 
enforce consumer protection standards related to the business 
of insurance.

                                Hearings

    The Committee on Financial Services' Subcommittee on 
Financial Institutions and Consumer Credit held a hearing 
examining matters relating to H.R. 3746 on December 7, 2017.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
January 17 and 18, 2018, and ordered H.R. 3746 to be reported 
favorably by a recorded vote of 37 yeas to 18 nays (Record vote 
no. FC-141), a quorum being present.

                            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. The 
sole recorded vote was on a motion by Chairman Hensarling to 
report the bill favorably to the House without amendment. The 
motion was agreed to by a recorded vote of 37 yeas to 18 nays 
(Record vote no. FC-141), a quorum being present.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of 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 states that H.R. 3746 
will clarify that state insurance regulators hold primary 
jurisdiction to enforce consumer protection standards related 
to the business of insurance.

   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.

                 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:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 10, 2018.
Hon. Jeb Hensarling,
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. 3746, the Business 
of Insurance Regulatory Reform Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Stephen 
Rabent.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 3746--Business of Insurance Regulatory Reform Act of 2017

    Under current law, the Consumer Financial Protection Bureau 
(CFPB) enforces federal consumer financial protection laws 
except when enforcement would involve entities' that are 
subject to state insurance regulation. That prohibition does 
not apply, however, for those entities' transactions involving 
consumer financial products or services or to the extent that 
an entity is subject to consumer financial protection laws.
    H.R. 3746 would clarify that the CFPB cannot enforce 
consumer financial protection laws on entities to the extent 
that they are engaged in the business of insurance, whether or 
not those entities offer products or services that are subject 
to consumer financial protection laws. Other lines of business 
for those entities would continue to be subject to CFPB 
enforcement.
    Using information from the CFPB, CBO estimates that 
enacting H.R. 3746 would have no significant effect on the 
agency's costs or operations because the bill would primarily 
codify current agency enforcement practices.
    CBO estimates that implementing H.R. 3746 could reduce 
civil penalties collected by the CFPB (which are recorded in 
the budget as revenues) and the subsequent direct spending of 
those penalties by slightly limiting the scope of enforcement 
cases the agency may pursue. Therefore, pay-as-you-go 
procedures apply. However, CBO estimates that those effects 
would not be significant over the 2018-2028 period.
    CBO estimates that enacting H.R. 3746 would not increase 
net direct spending or significantly increase on-budget 
deficits in any of the four consecutive 10-year periods 
beginning in 2029.
    H.R. 3746 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Stephen Rabent. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      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 the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed 
rulemakings: The Committee estimates that the bill requires no 
directed rulemakings within the meaning of such section.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section cites H.R. 3746 as the ``Business of Insurance 
Regulatory Reform Act of 2017.''

Section 2. Clarification to the authority of the Bureau with respect to 
        persons regulated by a state insurance regulator

    This section amends Section 1027(f) of the Consumer 
Financial Protection Act of 2010 to clarify the definition of 
the ``business of insurance.'' Specifically, this bill creates 
an explicit exception related to Bureau of Consumer Financial 
Protection authority to regulate insurance. In doing so, the 
bill limits the Bureau's jurisdiction over insurance, to the 
extent a person is engaged in the business of insurance, and 
state insurance regulators regulate the insurance activities.

         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, and existing law in which no 
change is proposed is shown in roman):

         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 italics, and existing law in which no 
change is proposed is shown in roman):

CONSUMER FINANCIAL PROTECTION ACT OF 2010

           *       *       *       *       *       *       *



TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

           *       *       *       *       *       *       *


Subtitle B--General Powers of the Bureau

           *       *       *       *       *       *       *


SEC. 1027. LIMITATIONS ON AUTHORITIES OF THE BUREAU; PRESERVATION OF 
                    AUTHORITIES.

  (a) Exclusion for Merchants, Retailers, and Other Sellers of 
Nonfinancial Goods or Services.--
          (1) Sale or brokerage of nonfinancial good or 
        service.--The Bureau may not exercise any rulemaking, 
        supervisory, enforcement or other authority under this 
        title with respect to a person who is a merchant, 
        retailer, or seller of any nonfinancial good or service 
        and is engaged in the sale or brokerage of such 
        nonfinancial good or service, except to the extent that 
        such person is engaged in offering or providing any 
        consumer financial product or service, or is otherwise 
        subject to any enumerated consumer law or any law for 
        which authorities are transferred under subtitle F or 
        H.
          (2) Offering or provision of certain consumer 
        financial products or services in connection with the 
        sale or brokerage of nonfinancial good or service.--
                  (A) In general.--Except as provided in 
                subparagraph (B), and subject to subparagraph 
                (C), the Bureau may not exercise any 
                rulemaking, supervisory, enforcement, or other 
                authority under this title with respect to a 
                merchant, retailer, or seller of nonfinancial 
                goods or services, but only to the extent that 
                such person--
                          (i) extends credit directly to a 
                        consumer, in a case in which the good 
                        or service being provided is not itself 
                        a consumer financial product or service 
                        (other than credit described in this 
                        subparagraph), exclusively for the 
                        purpose of enabling that consumer to 
                        purchase such nonfinancial good or 
                        service directly from the merchant, 
                        retailer, or seller;
                          (ii) directly, or through an 
                        agreement with another person, collects 
                        debt arising from credit extended as 
                        described in clause (i); or
                          (iii) sells or conveys debt described 
                        in clause (i) that is delinquent or 
                        otherwise in default.
                  (B) Applicability.--Subparagraph (A) does not 
                apply to any credit transaction or collection 
                of debt, other than as described in 
                subparagraph (C)(i), arising from a transaction 
                described in subparagraph (A)--
                          (i) in which the merchant, retailer, 
                        or seller of nonfinancial goods or 
                        services assigns, sells or otherwise 
                        conveys to another person such debt 
                        owed by the consumer (except for a sale 
                        of debt that is delinquent or otherwise 
                        in default, as described in 
                        subparagraph (A)(iii));
                          (ii) in which the credit extended 
                        significantly exceeds the market value 
                        of the nonfinancial good or service 
                        provided, or the Bureau otherwise finds 
                        that the sale of the nonfinancial good 
                        or service is done as a subterfuge, so 
                        as to evade or circumvent the 
                        provisions of this title; or
                          (iii) in which the merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services regularly extends 
                        credit and the credit is subject to a 
                        finance charge.
                  (C) Limitations.--
                          (i) In general.--Notwithstanding 
                        subparagraph (B), subparagraph (A) 
                        shall apply with respect to a merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services that is not engaged 
                        significantly in offering or providing 
                        consumer financial products or 
                        services.
                          (ii) Exception.--Subparagraph (A) and 
                        clause (i) of this subparagraph do not 
                        apply to any merchant, retailer, or 
                        seller of nonfinancial goods or 
                        services--
                                  (I) if such merchant, 
                                retailer, or seller of 
                                nonfinancial goods or services 
                                is engaged in a transaction 
                                described in subparagraph 
                                (B)(i) or (B)(ii); or
                                  (II) to the extent that such 
                                merchant, retailer, or seller 
                                is subject to any enumerated 
                                consumer law or any law for 
                                which authorities are 
                                transferred under subtitle F or 
                                H, but the Bureau may exercise 
                                such authority only with 
                                respect to that law.
                  (D) Rules.--
                          (i) Authority of other agencies.--No 
                        provision of this title shall be 
                        construed as modifying, limiting, or 
                        superseding the supervisory or 
                        enforcement authority of the Federal 
                        Trade Commission or any other agency 
                        (other than the Bureau) with respect to 
                        credit extended, or the collection of 
                        debt arising from such extension, 
                        directly by a merchant or retailer to a 
                        consumer exclusively for the purpose of 
                        enabling that consumer to purchase 
                        nonfinancial goods or services directly 
                        from the merchant or retailer.
                          (ii) Small businesses.--A merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services that would otherwise 
                        be subject to the authority of the 
                        Bureau solely by virtue of the 
                        application of subparagraph (B)(iii) 
                        shall be deemed not to be engaged 
                        significantly in offering or providing 
                        consumer financial products or services 
                        under subparagraph (C)(i), if such 
                        person--
                                  (I) only extends credit for 
                                the sale of nonfinancial goods 
                                or services, as described in 
                                subparagraph (A)(i);
                                  (II) retains such credit on 
                                its own accounts (except to 
                                sell or convey such debt that 
                                is delinquent or otherwise in 
                                default); and
                                  (III) meets the relevant 
                                industry size threshold to be a 
                                small business concern, based 
                                on annual receipts, pursuant to 
                                section 3 of the Small Business 
                                Act (15 U.S.C. 632) and the 
                                implementing rules thereunder.
                          (iii) Initial year.--A merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services shall be deemed to 
                        meet the relevant industry size 
                        threshold described in clause (ii)(III) 
                        during the first year of operations of 
                        that business concern if, during that 
                        year, the receipts of that business 
                        concern reasonably are expected to meet 
                        that size threshold.
                          (iv) Other standards for small 
                        business.--With respect to a merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services that is a classified 
                        on a basis other than annual receipts 
                        for the purposes of section 3 of the 
                        Small Business Act (15 U.S.C. 632) and 
                        the implementing rules thereunder, such 
                        merchant, retailer, or seller shall be 
                        deemed to meet the relevant industry 
                        size threshold described in clause 
                        (ii)(III) if such merchant, retailer, 
                        or seller meets the relevant industry 
                        size threshold to be a small business 
                        concern based on the number of 
                        employees, or other such applicable 
                        measure, established under that Act.
                  (E) Exception from state enforcement.--To the 
                extent that the Bureau may not exercise 
                authority under this subsection with respect to 
                a merchant, retailer, or seller of nonfinancial 
                goods or services, no action by a State 
                attorney general or State regulator with 
                respect to a claim made under this title may be 
                brought under subsection 1042(a), with respect 
                to an activity described in any of clauses (i) 
                through (iii) of subparagraph (A) by such 
                merchant, retailer, or seller of nonfinancial 
                goods or services.
  (b) Exclusion for Real Estate Brokerage Activities.--
          (1) Real estate brokerage activities excluded.--
        Without limiting subsection (a), and except as 
        permitted in paragraph (2), the Bureau may not exercise 
        any rulemaking, supervisory, enforcement, or other 
        authority under this title with respect to a person 
        that is licensed or registered as a real estate broker 
        or real estate agent, in accordance with State law, to 
        the extent that such person--
                  (A) acts as a real estate agent or broker for 
                a buyer, seller, lessor, or lessee of real 
                property;
                  (B) brings together parties interested in the 
                sale, purchase, lease, rental, or exchange of 
                real property;
                  (C) negotiates, on behalf of any party, any 
                portion of a contract relating to the sale, 
                purchase, lease, rental, or exchange of real 
                property (other than in connection with the 
                provision of financing with respect to any such 
                transaction); or
                  (D) offers to engage in any activity, or act 
                in any capacity, described in subparagraph (A), 
                (B), or (C).
          (2) Description of activities.--The Bureau may 
        exercise rulemaking, supervisory, enforcement, or other 
        authority under this title with respect to a person 
        described in paragraph (1) when such person is--
                  (A) engaged in an activity of offering or 
                providing any consumer financial product or 
                service, except that the Bureau may exercise 
                such authority only with respect to that 
                activity; or
                  (B) otherwise subject to any enumerated 
                consumer law or any law for which authorities 
                are transferred under subtitle F or H, but the 
                Bureau may exercise such authority only with 
                respect to that law.
  (c) Exclusion for Manufactured Home Retailers and Modular 
Home Retailers.--
          (1) In general.--The Director may not exercise any 
        rulemaking, supervisory, enforcement, or other 
        authority over a person to the extent that--
                  (A) such person is not described in paragraph 
                (2); and
                  (B) such person--
                          (i) acts as an agent or broker for a 
                        buyer or seller of a manufactured home 
                        or a modular home;
                          (ii) facilitates the purchase by a 
                        consumer of a manufactured home or 
                        modular home, by negotiating the 
                        purchase price or terms of the sales 
                        contract (other than providing 
                        financing with respect to such 
                        transaction); or
                          (iii) offers to engage in any 
                        activity described in clause (i) or 
                        (ii).
          (2) Description of activities.--A person is described 
        in this paragraph to the extent that such person is 
        engaged in the offering or provision of any consumer 
        financial product or service or is otherwise subject to 
        any enumerated consumer law or any law for which 
        authorities are transferred under subtitle F or H.
          (3) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) Manufactured home.--The term 
                ``manufactured home'' has the same meaning as 
                in section 603 of the National Manufactured 
                Housing Construction and Safety Standards Act 
                of 1974 (42 U.S.C. 5402).
                  (B) Modular home.--The term ``modular home'' 
                means a house built in a factory in 2 or more 
                modules that meet the State or local building 
                codes where the house will be located, and 
                where such modules are transported to the 
                building site, installed on foundations, and 
                completed.
  (d) Exclusion for Accountants and Tax Preparers.--
          (1) In general.--Except as permitted in paragraph 
        (2), the Bureau may not exercise any rulemaking, 
        supervisory, enforcement, or other authority over--
                  (A) any person that is a certified public 
                accountant, permitted to practice as a 
                certified public accounting firm, or certified 
                or licensed for such purpose by a State, or any 
                individual who is employed by or holds an 
                ownership interest with respect to a person 
                described in this subparagraph, when such 
                person is performing or offering to perform--
                          (i) customary and usual accounting 
                        activities, including the provision of 
                        accounting, tax, advisory, or other 
                        services that are subject to the 
                        regulatory authority of a State board 
                        of accountancy or a Federal authority; 
                        or
                          (ii) other services that are 
                        incidental to such customary and usual 
                        accounting activities, to the extent 
                        that such incidental services are not 
                        offered or provided--
                                  (I) by the person separate 
                                and apart from such customary 
                                and usual accounting 
                                activities; or
                                  (II) to consumers who are not 
                                receiving such customary and 
                                usual accounting activities; or
                  (B) any person, other than a person described 
                in subparagraph (A) that performs income tax 
                preparation activities for consumers.
          (2) Description of activities.--
                  (A) In general.--Paragraph (1) shall not 
                apply to any person described in paragraph 
                (1)(A) or (1)(B) to the extent that such person 
                is engaged in any activity which is not a 
                customary and usual accounting activity 
                described in paragraph (1)(A) or incidental 
                thereto but which is the offering or provision 
                of any consumer financial product or service, 
                except to the extent that a person described in 
                paragraph (1)(A) is engaged in an activity 
                which is a customary and usual accounting 
                activity described in paragraph (1)(A), or 
                incidental thereto.
                  (B) Not a customary and usual accounting 
                activity.--For purposes of this subsection, 
                extending or brokering credit is not a 
                customary and usual accounting activity, or 
                incidental thereto.
                  (C) Rule of construction.--For purposes of 
                subparagraphs (A) and (B), a person described 
                in paragraph (1)(A) shall not be deemed to be 
                extending credit, if such person is only 
                extending credit directly to a consumer, 
                exclusively for the purpose of enabling such 
                consumer to purchase services described in 
                clause (i) or (ii) of paragraph (1)(A) directly 
                from such person, and such credit is--
                          (i) not subject to a finance charge; 
                        and
                          (ii) not payable by written agreement 
                        in more than 4 installments.
                  (D) Other limitations.--Paragraph (1) does 
                not apply to any person described in paragraph 
                (1)(A) or (1)(B) that is otherwise subject to 
                any enumerated consumer law or any law for 
                which authorities are transferred under 
                subtitle F or H.
  (e) Exclusion for Practice of Law.--
          (1) In general.--Except as provided under paragraph 
        (2), the Bureau may not exercise any supervisory or 
        enforcement authority with respect to an activity 
        engaged in by an attorney as part of the practice of 
        law under the laws of a State in which the attorney is 
        licensed to practice law.
          (2) Rule of construction.--Paragraph (1) shall not be 
        construed so as to limit the exercise by the Bureau of 
        any supervisory, enforcement, or other authority 
        regarding the offering or provision of a consumer 
        financial product or service described in any 
        subparagraph of section 1002(5)--
                  (A) that is not offered or provided as part 
                of, or incidental to, the practice of law, 
                occurring exclusively within the scope of the 
                attorney-client relationship; or
                  (B) that is otherwise offered or provided by 
                the attorney in question with respect to any 
                consumer who is not receiving legal advice or 
                services from the attorney in connection with 
                such financial product or service.
          (3) Existing authority.--Paragraph (1) shall not be 
        construed so as to limit the authority of the Bureau 
        with respect to any attorney, to the extent that such 
        attorney is otherwise subject to any of the enumerated 
        consumer laws or the authorities transferred under 
        subtitle F or H.
  (f) Exclusion for Persons Regulated by a State Insurance 
Regulator.--
          (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the 
        authority of any State insurance regulator to adopt 
        rules, initiate enforcement proceedings, or take any 
        other action with respect to a person regulated by a 
        State insurance regulator. Except as provided in 
        paragraph (2), the Bureau shall have no authority to 
        exercise any power to enforce this title with respect 
        to a person regulated by a State insurance regulator.
          (2)  [Description of activities.--]  [Paragraph (1)] 
        Exceptions._
  (A) Authority._Paragraph (1)  does not apply to any person 
described in such paragraph to the extent that such person is 
engaged in the offering or provision of any consumer financial 
product or service or is otherwise subject to any enumerated 
consumer law or any law for which authorities are transferred 
under subtitle F or H.
                  (B) Limitation.--With respect to a person 
                regulated by a State insurance regulator--
                          (i) and if such person is offering or 
                        providing a consumer financial product 
                        or service, the Bureau may not enforce 
                        this title with respect to such person 
                        to the extent such person is engaged in 
                        the business of insurance; or
                          (ii) and if such person is subject to 
                        any enumerated consumer law or any law 
                        for which authorities are transferred 
                        under subtitle F or H, the authority of 
                        the Bureau to enforce such law with 
                        respect to such person shall be 
                        narrowly construed to the extent such 
                        person is engaged in the business of 
                        insurance.
          (3) State insurance authority under gramm-leach-
        bliley.--Notwithstanding paragraph (2), the Bureau 
        shall not exercise any authorities that are granted a 
        State insurance authority under section 505(a)(6) of 
        the Gramm-Leach-Bliley Act with respect to a person 
        regulated by a State insurance authority.
          (4) Rule of construction.--The enforcement of this 
        title shall be broadly construed in favor of the 
        authority of a State insurance regulator with respect 
        to a person regulated by a State insurance regulator.
  (g) Exclusion for Employee Benefit and Compensation Plans and 
Certain Other Arrangements Under the Internal Revenue Code of 
1986.--
          (1) Preservation of authority of other agencies.--No 
        provision of this title shall be construed as altering, 
        amending, or affecting the authority of the Secretary 
        of the Treasury, the Secretary of Labor, or the 
        Commissioner of Internal Revenue to adopt regulations, 
        initiate enforcement proceedings, or take any actions 
        with respect to any specified plan or arrangement.
          (2) Activities not constituting the offering or 
        provision of any consumer financial product or 
        service.--For purposes of this title, a person shall 
        not be treated as having engaged in the offering or 
        provision of any consumer financial product or service 
        solely because such person is--
                  (A) a specified plan or arrangement;
                  (B) engaged in the activity of establishing 
                or maintaining, for the benefit of employees of 
                such person (or for members of an employee 
                organization), any specified plan or 
                arrangement; or
                  (C) engaged in the activity of establishing 
                or maintaining a qualified tuition program 
                under section 529(b)(1) of the Internal Revenue 
                Code of 1986 offered by a State or other 
                prepaid tuition program offered by a State.
          (3) Limitation on bureau authority.--
                  (A) In general.--Except as provided under 
                subparagraphs (B) and (C), the Bureau may not 
                exercise any rulemaking or enforcement 
                authority with respect to products or services 
                that relate to any specified plan or 
                arrangement.
                  (B) Bureau action pursuant to agency 
                request.--
                          (i) Agency request.--The Secretary 
                        and the Secretary of Labor may jointly 
                        issue a written request to the Bureau 
                        regarding implementation of appropriate 
                        consumer protection standards under 
                        this title with respect to the 
                        provision of services relating to any 
                        specified plan or arrangement.
                          (ii) Agency response.--In response to 
                        a request by the Bureau, the Secretary 
                        and the Secretary of Labor shall 
                        jointly issue a written response, not 
                        later than 90 days after receipt of 
                        such request, to grant or deny the 
                        request of the Bureau regarding 
                        implementation of appropriate consumer 
                        protection standards under this title 
                        with respect to the provision of 
                        services relating to any specified plan 
                        or arrangement.
                          (iii) Scope of bureau action.--
                        Subject to a request or response 
                        pursuant to clause (i) or clause (ii) 
                        by the agencies made under this 
                        subparagraph, the Bureau may exercise 
                        rulemaking authority, and may act to 
                        enforce a rule prescribed pursuant to 
                        such request or response, in accordance 
                        with the provisions of this title. A 
                        request or response made by the 
                        Secretary and the Secretary of Labor 
                        under this subparagraph shall describe 
                        the basis for, and scope of, 
                        appropriate consumer protection 
                        standards to be implemented under this 
                        title with respect to the provision of 
                        services relating to any specified plan 
                        or arrangement.
                  (C) Description of products or services.--To 
                the extent that a person engaged in providing 
                products or services relating to any specified 
                plan or arrangement is subject to any 
                enumerated consumer law or any law for which 
                authorities are transferred under subtitle F or 
                H, subparagraph (A) shall not apply with 
                respect to that law.
          (4) Specified plan or arrangement.--For purposes of 
        this subsection, the term ``specified plan or 
        arrangement'' means any plan, account, or arrangement 
        described in section 220, 223, 401(a), 403(a), 403(b), 
        408, 408A, 529, 529A, or 530 of the Internal Revenue 
        Code of 1986, or any employee benefit or compensation 
        plan or arrangement, including a plan that is subject 
        to title I of the Employee Retirement Income Security 
        Act of 1974, or any prepaid tuition program offered by 
        a State.
  (h) Persons Regulated by a State Securities Commission.--
          (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the 
        authority of any securities commission (or any agency 
        or office performing like functions) of any State to 
        adopt rules, initiate enforcement proceedings, or take 
        any other action with respect to a person regulated by 
        any securities commission (or any agency or office 
        performing like functions) of any State. Except as 
        permitted in paragraph (2) and subsection (f), the 
        Bureau shall have no authority to exercise any power to 
        enforce this title with respect to a person regulated 
        by any securities commission (or any agency or office 
        performing like functions) of any State, but only to 
        the extent that the person acts in such regulated 
        capacity.
          (2) Description of activities.--Paragraph (1) shall 
        not apply to any person to the extent such person is 
        engaged in the offering or provision of any consumer 
        financial product or service, or is otherwise subject 
        to any enumerated consumer law or any law for which 
        authorities are transferred under subtitle F or H.
  (i) Exclusion for Persons Regulated by the Commission.--
          (1) In general.--No provision of this title may be 
        construed as altering, amending, or affecting the 
        authority of the Commission to adopt rules, initiate 
        enforcement proceedings, or take any other action with 
        respect to a person regulated by the Commission. The 
        Bureau shall have no authority to exercise any power to 
        enforce this title with respect to a person regulated 
        by the Commission.
          (2) Consultation and coordination.--Notwithstanding 
        paragraph (1), the Commission shall consult and 
        coordinate, where feasible, with the Bureau with 
        respect to any rule (including any advance notice of 
        proposed rulemaking) regarding an investment product or 
        service that is the same type of product as, or that 
        competes directly with, a consumer financial product or 
        service that is subject to the jurisdiction of the 
        Bureau under this title or under any other law. In 
        carrying out this paragraph, the agencies shall 
        negotiate an agreement to establish procedures for such 
        coordination, including procedures for providing 
        advance notice to the Bureau when the Commission is 
        initiating a rulemaking.
  (j) Exclusion for Persons Regulated by the Commodity Futures 
Trading Commission.--
          (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the 
        authority of the Commodity Futures Trading Commission 
        to adopt rules, initiate enforcement proceedings, or 
        take any other action with respect to a person 
        regulated by the Commodity Futures Trading Commission. 
        The Bureau shall have no authority to exercise any 
        power to enforce this title with respect to a person 
        regulated by the Commodity Futures Trading Commission.
          (2) Consultation and coordination.--Notwithstanding 
        paragraph (1), the Commodity Futures Trading Commission 
        shall consult and coordinate with the Bureau with 
        respect to any rule (including any advance notice of 
        proposed rulemaking) regarding a product or service 
        that is the same type of product as, or that competes 
        directly with, a consumer financial product or service 
        that is subject to the jurisdiction of the Bureau under 
        this title or under any other law.
  (k) Exclusion for Persons Regulated by the Farm Credit 
Administration.--
          (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the 
        authority of the Farm Credit Administration to adopt 
        rules, initiate enforcement proceedings, or take any 
        other action with respect to a person regulated by the 
        Farm Credit Administration. The Bureau shall have no 
        authority to exercise any power to enforce this title 
        with respect to a person regulated by the Farm Credit 
        Administration.
          (2) Definition.--For purposes of this subsection, the 
        term ``person regulated by the Farm Credit 
        Administration'' means any Farm Credit System 
        institution that is chartered and subject to the 
        provisions of the Farm Credit Act of 1971 (12 U.S.C. 
        2001 et seq.).
  (l) Exclusion for Activities Relating to Charitable 
Contributions.--
          (1) In general.--The Director and the Bureau may not 
        exercise any rulemaking, supervisory, enforcement, or 
        other authority, including authority to order 
        penalties, over any activities related to the 
        solicitation or making of voluntary contributions to a 
        tax-exempt organization as recognized by the Internal 
        Revenue Service, by any agent, volunteer, or 
        representative of such organizations to the extent the 
        organization, agent, volunteer, or representative 
        thereof is soliciting or providing advice, information, 
        education, or instruction to any donor or potential 
        donor relating to a contribution to the organization.
          (2) Limitation.--The exclusion in paragraph (1) does 
        not apply to other activities not described in 
        paragraph (1) that are the offering or provision of any 
        consumer financial product or service, or are otherwise 
        subject to any enumerated consumer law or any law for 
        which authorities are transferred under subtitle F or 
        H.
  (m) Insurance.--The Bureau may not define as a financial 
product or service, by regulation or otherwise, engaging in the 
business of insurance.
  (n) Limited Authority of the Bureau.--Notwithstanding 
subsections (a) through (h) and (l), a person subject to or 
described in one or more of such provisions--
          (1) may be a service provider; and
          (2) may be subject to requests from, or requirements 
        imposed by, the Bureau regarding information in order 
        to carry out the responsibilities and functions of the 
        Bureau and in accordance with section 1022, 1052, or 
        1053.
  (o) No Authority To Impose Usury Limit.--No provision of this 
title shall be construed as conferring authority on the Bureau 
to establish a usury limit applicable to an extension of credit 
offered or made by a covered person to a consumer, unless 
explicitly authorized by law.
  (p) Attorney General.--No provision of this title, including 
section 1024(c)(1), shall affect the authorities of the 
Attorney General under otherwise applicable provisions of law.
  (q) Secretary of the Treasury.--No provision of this title 
shall affect the authorities of the Secretary, including with 
respect to prescribing rules, initiating enforcement 
proceedings, or taking other actions with respect to a person 
that performs income tax preparation activities for consumers.
  (r) Deposit Insurance and Share Insurance.--Nothing in this 
title shall affect the authority of the Corporation under the 
Federal Deposit Insurance Act or the National Credit Union 
Administration Board under the Federal Credit Union Act as to 
matters related to deposit insurance and share insurance, 
respectively.
  (s) Fair Housing Act.--No provision of this title shall be 
construed as affecting any authority arising under the Fair 
Housing Act.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    Democrats support the state-based system of insurance 
regulation in the U.S., and believe that the Consumer Financial 
Protection Bureau's (Consumer Bureau) powers with respect to 
insurance are clearly and appropriately limited.\1\ Generally 
speaking, the Consumer Bureau does not have supervisory or 
enforcement authority over insurance. However, there are very 
narrow exceptions to this general exemption to ensure that 
there are no loopholes in our oversight or our ability to 
protect consumers. Nevertheless, H.R. 3746 would roll back the 
Consumer Bureau's already limited supervisory and enforcement 
authority over insurance, effectively creating opportunities 
for regulatory arbitrage and risking consumer harm.
---------------------------------------------------------------------------
    \1\12 U.S.C. Sec. 5517(f)(1) states that ``no provision of this 
title shall be construed as altering, amending, or affecting the 
authority of any State insurance regulator to adopt rules, initiate 
enforcement proceedings, or take any other action with respect to a 
person regulated by a State insurance regulator.''
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    The Consumer Bureau has supervisory and enforcement 
authority over insurance companies or persons engaged in the 
business of insurance to the extent that they are engaged in 
the offering or provision of any consumer financial product or 
service,\2\ or acting as a ``service provider''\3\ that 
provides a material service to a bank in connection with the 
offering of a financial product or service.\4\ This ensures 
that an insurance company cannot unfairly evade scrutiny when a 
financial institution, or service provider thereof, would be 
subject to Consumer Bureau scrutiny for engaging in the same 
activity. For example, Wells Fargo's negligent administration 
of its force-placed auto insurance program relied on its 
partnership with National General, an insurance provider.\5\ 
Wells Fargo and National General were responsible for pushing 
hundreds of thousands of customers into delinquency or causing 
them to have their car wrongly repossessed. Under current law, 
the Consumer Bureau is authorized to take action against 
insurance companies like National General that act as bank 
service providers, but under H.R. 3746, this authority would be 
eliminated.
---------------------------------------------------------------------------
    \2\12 U.S.C. Sec. 5517(f)(2).
    \3\A ``service provider'' is defined as any entity that provides a 
material service to a bank or nonbank subject to the supervision of the 
Consumer Bureau in connection with the provision of a financial product 
or service. 12 U.S.C. Sec. Sec. 5481(6) and (26).
    \4\12 U.S.C. Sec. 5517(f)(2).
    \5\https://www.nytimes.com/2017/07/27/business/wells-fargo-
unwanted-auto-insurance.html.
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    The Dodd-Frank Act also grants the Consumer Bureau 
supervisory and enforcement authority over insurance companies 
to the extent that they are ``subject to any enumerated 
consumer law . . .''\6\ For example, insurance companies are 
subject to the Real Estate Settlement Procedures Act (RESPA), 
which prohibits any person from giving or receiving a fee or 
kickback as part of a real estate settlement. The Consumer 
Bureau has brought multiple civil actions against insurance 
companies for violating this provision of RESPA, particularly 
in the aftermath of the financial crisis. Under H.R. 3746, the 
Consumer Bureau would no longer be able to bring such actions. 
Insurance companies are also subject to the Truth in Lending 
Act (TILA), the Equal Credit Opportunity Act (ECOA), and the 
Fair Credit Reporting Act (FCRA), but under H.R. 3746, 
insurance companies that violate these important consumer laws 
would be able to evade Consumer Bureau scrutiny. Even though 
state insurance regulators have authority over insurance 
companies, they cannot bring actions under these federal laws, 
and it is not clear that any other federal agency would have 
authority to do so.
---------------------------------------------------------------------------
    \6\12 U.S.C Sec. Sec. 5514(e), 5515(d), and Sec. 5516(e); 12 U.S.C. 
5517(n).
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    In sum, H.R. 3746 would substantially scale back the 
Consumer Bureau's already limited authority over insurance, 
ultimately leaving consumers at higher risk of fraudulent and 
abusive practices. For these reasons, we oppose H.R. 3746.

                                   Maxine Waters.
                                   Michael E. Capuano.
                                   Carolyn B. Maloney.
                                   Keith Ellison.
                                   Al Green.
                                   Stephen F. Lynch.

                                  [all]