[House Report 115-885]
[From the U.S. Government Publishing Office]


115th Congress    }                                  {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                  {        115-885

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



 
             COMMUNITY FINANCIAL INSTITUTION EXEMPTION ACT

                                _______
                                

 August 3, 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. 1264]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 1264) to provide an exemption from rules and 
regulations of the Bureau of Consumer Financial protection for 
community financial institutions, and for other purposes, 
having considered the same, report favorably thereon with 
amendments and recommend that the bill as amended do pass.
    The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Community Financial Institution 
Exemption Act''.

SEC. 2. EXEMPTION FOR CERTAIN FINANCIAL INSTITUTIONS.

  Section 1022(b) of the Consumer Financial Protection Act of 2010 (12 
U.S.C. 5512(b)) is amended--
          (1) in paragraph (3), by amending the heading to read as 
        follows: ``General exemptions'';
          (2) by redesignating paragraph (4) as paragraph (5); and
          (3) by inserting after paragraph (3) the following:
          ``(4) Specific exemption for certain financial 
        institutions.--
                  ``(A) In general.--An insured depository institution 
                or credit union with less than $50,000,000,000 in 
                consolidated assets shall be exempt from all rules and 
                regulations issued by the Bureau.
                  ``(B) Exception.--The Bureau may revoke an exemption 
                provided under subparagraph (A) with respect to a 
                specific rule or regulation and a specific class of 
                insured depository institutions or credit unions 
                described in subparagraph (A) if--
                          ``(i) the Bureau makes a detailed, written 
                        finding that such class of insured depository 
                        institutions or credit unions described in 
                        subparagraph (A) has engaged in a pattern or 
                        practice of activities that have been 
                        detrimental to the interests of consumers and 
                        are of a type that the specific rule or 
                        regulation is intended to address;
                          ``(ii) the Bureau consults with the Federal 
                        banking agencies with respect to such 
                        revocation; and
                          ``(iii) each Federal banking agency provides 
                        the Bureau with a written notice stating that 
                        the Federal banking agency agrees with such 
                        revocation.
                  ``(C) Effective date; effect on prior rules.--
                          ``(i) Effective date.--This paragraph shall 
                        take effect with respect to rules and 
                        regulations issued or modified after the date 
                        of enactment of this paragraph.
                          ``(ii) Effect on prior rules.--This paragraph 
                        shall not prohibit the Bureau from modifying a 
                        rule or regulation issued prior to the date of 
                        enactment of this paragraph with respect to 
                        insured depository institutions or credit 
                        unions described in subparagraph (A) if the 
                        effect of such modification is to expand a 
                        current exemption or to reduce the costs and 
                        the regulatory burden associated with complying 
                        with such rule or regulation.
                  ``(D) Federal banking agency defined.--For purposes 
                of this paragraph, the term `Federal banking agency' 
                means the Board of Governors, the Office of the 
                Comptroller of the Currency, the Corporation, and the 
                National Credit Union Administration.''.

    Amend the title so as to read:
    A bill to provide an exemption from rules and regulations 
of the Bureau of Consumer Financial Protection for certain 
financial institutions, and for other purposes.

                          Purpose and Summary

    Introduced by Representative Roger Williams on February 28, 
2017, H.R. 1264, the ``Community Financial Institution 
Exemption Act'', amends the Dodd-Frank Wall Street Reform and 
Consumer Protection Act of 2010 [P.L. 111-203] to exempt 
insured depository institutions or credit unions with less than 
$50 billion in consolidated assets from all rules and 
regulations issued by the Bureau of Consumer Financial 
Protection (BCFP). Under specified circumstances, and with the 
written agreement of the Board of Governors of the Federal 
Reserve System (Federal Reserve) and other specified federal 
banking agencies, the BCFP may revoke such an exemption with 
respect to a certain rule, regulation, or class of 
institutions.

                  Background and Need for Legislation

    Title X of the Dodd-Frank Act established the BCFP with a 
dual mandate to enforce federal consumer financial law and 
ensure that consumers have access to financial products and 
services, and warranting fair, transparent, and competitive 
markets for such services and products. Under the Dodd-Frank 
Act, the Bureau can issue rules, examine certain institutions, 
and enforce consumer protection laws and regulations. Under the 
same authority, the BCFP can also exempt, conditionally or 
unconditionally, covered persons from its rules and 
regulations.
    Although Dodd-Frank's reforms are purportedly directed 
primarily at large, complex U.S. financial institutions, the 
Act's breadth, coupled with the regulatory response from 2010 
through 2016, captured smaller community financial institutions 
as well. These smaller institutions regularly express concerns 
to the Bureau and to Congress about the growing weight and 
complexity of regulation, and never-ending compliance costs, 
which affects their ability to provide the products and 
services necessary to allow small businesses to grow and 
consumers to access credit to realize their financial and 
personal goals.
    The regulatory burden falls into three major categories: 
(1) additional operational, legal and auditing costs associated 
with compliance; (2) restrictions on fees, interest rates, or 
other revenue; and (3) unintentional barriers to offer a 
product or service because of regulatory complexity.
    Dodd-Frank's complex and expansive regulatory regime has 
had a ``trickle-down effect, where regulation originally meant 
for big institutions is being applied to smaller banks,'' often 
in the form of bank examiners identifying those regulations as 
``best practices'' that should be followed by institutions 
regardless of their size. Smaller institutions are 
disproportionately affected by increased regulation because 
they are less able to absorb additional costs.
    The explosive growth of bank regulation following the 
enactment of Dodd-Frank has made it significantly harder for 
smaller banks and credit unions to serve their customers. 
Community financial institutions find that their compliance 
costs have gone up as they attempt to keep up with new 
regulations and more intrusive examinations. New regulations 
and higher compliance costs have forced small banks and credit 
unions to cut back on the services they offer to their 
customers. As a result, many consumers have found that their 
local banks can no longer provide them with the products and 
services that they need and want.
    Regulators have acknowledged the validity of these 
concerns. For example, in an October 4, 2017, speech, Federal 
Reserve Chairwoman Janet Yellen stated:
    The Fed has been working hard to ensure that its regulation 
and supervision of banks are tailored appropriately to the 
size, complexity and role different institutions play in the 
financial system . . . [f]or community banks, which by and 
large avoided the risky business practices that contributed to 
the financial crisis, we have been focused on making sure that 
much-needed improvements to regulation and supervision since 
the crisis are appropriate and not unduly burdensome[.]\1\
---------------------------------------------------------------------------
    \1\https://www.federalreserve.gov/newsevents/speech/
yellen20171004a.htm.
---------------------------------------------------------------------------
    These findings are buttressed by a 2014 working paper by 
the Mercatus Center at George Mason University which surveyed 
``approximately 200 banks across 41 states with less than $10 
billion in assets each, serving mostly rural and small 
metropolitan markets.''\2\ The authors found that ``Dodd-Frank 
has proved burdensome to small banks, and customers are seeing 
the effects of the increased regulatory burden through reduced 
product and service offerings as small banks rethink their 
lines of business and consider consolidation activity.'' As a 
result, ``[t]hese customers . . . may shift their patronage to 
larger banks that enjoy competitive advantages in managing 
regulatory costs but are not as conveniently located, do not 
provide the same level of customer service, or do not offer a 
regionally tailored product mix. Large banks may also not be as 
willing to serve the customers, such as small businesses and 
rural populations, which small banks typically serve.''
---------------------------------------------------------------------------
    \2\https://www.mercatus.org/publication/how-are-small-banks-faring-
under-dodd-frank.
---------------------------------------------------------------------------
    The Mercatus study also explained how the Dodd-Frank Act's 
``one-size-fits-all'' regulatory approach harms small banks and 
their customers:

          ``Regulations--such as many of those emerging from 
        Dodd-Frank--that encourage or insist on standardization 
        of bank products and services can be particularly 
        harmful to small banks and their customers. Large banks 
        find it profitable to offer standardized products. 
        Small banks tend to serve idiosyncratic markets, and 
        they succeed by molding their business models to the 
        economic contours of their local communities. A large 
        bank cannot accommodate certain types of customers with 
        its standard products and processes. If federal banking 
        regulations require small banks to mimic these products 
        and processes, these customers might find that small 
        banks cannot serve them either.''\3\
---------------------------------------------------------------------------
    \3\Id.

    The result of a less competitive marketplace, where smaller 
institutions are overwhelmed by the volume and complexity of 
regulations and are forced to exit business lines or seek to 
merge with other institutions, is fewer and more expensive 
borrowing choices for consumers and small businesses--
particularly for those economically disadvantaged groups that 
have historically had the most difficulty to access credit.
    By exempting institutions with less than $50 billion in 
total consolidated assets from the Bureau's current and future 
rules and regulations, H.R. 1264 appropriately refines Dodd-
Frank's breadth and interpretation by aggressive regulators and 
replaces it with a regulatory regime that recognizes that 
small, non-threatening, community-based financial institutions 
did not cause the financial crisis, and are fundamentally 
incapable of inflicting harm relative to the onerous 
regulations exacted upon them. The exemption provided by H.R. 
1264 does not exempt these institutions from all prudential 
regulation. The Federal Reserve, the Office of the Comptroller 
of the Currency, the Federal Deposit Insurance Corporation or 
the National Credit Union Administration would continue to 
issue regulations, examine, and enforce the consumer finance 
laws for institutions that H.R. 1264 would exempt from the 
Bureau's direct oversight. There are approximately 38 banks 
with total consolidated assets of $50 billion or greater. 
Approximately four of those 38 are traditional banks, meaning 
that they do not engage in a wider range of nonbank financial 
activities that could present risk. Therefore, approximately 
5,700 banks with less than $50 billion in assets, and the 
consumers they serve, would directly benefit from this 
exemption.

                                Hearings

    The Committee on Financial Services held a hearing 
examining matters relating to H.R. 1264 on January 9, 2018.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
January 18, 2018, and ordered H.R. 1264 to be reported 
favorably to the as amended by a recorded vote of 30 yeas to 25 
nays (recorded vote no. FC-137), a quorum being present. Before 
the motion to report was offered, the Committee adopted an 
amendment in the nature of a substitute offered by Mr. Williams 
by voice vote.

                            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 as amended. The motion was 
agreed to by a recorded vote of 30 yeas to 25 nays (Record vote 
no. FC-137), 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. 1264 
will allow for small financial institutions with consolidated 
assets under $50 billion to more adequately provide reasonably 
priced financial services and products to the general public 
without having to abide by BCFP regulations and rules that were 
intended for significantly bigger institutions.

   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, May 11, 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. 1264, the 
Community Financial Institution Exemption Act.
    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. 1264--Community Financial Institution Exemption Act

    The Consumer Financial Protection Bureau (CFPB) enforces 
federal consumer financial protection laws but may exempt 
classes of institutions, service providers, or consumer 
financial products or services from its rules.
    H.R. 1264 would require the CFPB to exempt insured 
depository institutions and credit unions with less than $50 
billion in assets from all rules and regulations the agency 
issues or modifies after the date of the bill's enactment. The 
bill would authorize CFPB to revoke the exemption from a 
specific rule for a specific class of institutions under 
certain circumstances. The agency also could modify existing 
rules and regulations for insured depository institutions and 
credit unions with less than $50 billion in assets if the 
modification would expand a current exemption or reduce the 
cost and regulatory burden of compliance.
    Using information from the CFPB, CBO estimates that 
enacting H.R. 1264 would require the equivalent of one 
additional employee to expand the CBPB's current analyses of 
the effects of new or modified rules and regulations. Assuming 
the CFPB hired an additional employee to do that work the bill 
would increase direct spending by $2 million over the 2019-2028 
period. Because enacting H.R. 1264 could affect direct 
spending, pay-as-you-go procedures apply. Enacting the bill 
would not affect revenues.
    CBO estimates that enacting H.R. 1264 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2029.
    H.R. 1264 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 reviewed 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 rule 
makings: The Committee estimates that the bill requires no 
directed rule makings within the meaning of such section.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section cites H.R. 1264 as the ``Community Financial 
Institutions Exemption Act''.

Section 2. Exemption for certain financial institutions

    This section amends Section 1022(b) of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act of 2010 (12 U.S.C. 
5512(b)) by providing for insured depository institution or 
credit union with less than $50 billion in consolidated assets 
to be exempt from all rules and regulations issued by the 
Bureau. The Bureau may revoke an exemption for an institution 
with less than $50 billion in assets or a specific rule if the 
Bureau finds an institution has engaged in a pattern of 
activity that is detrimental to the interest of consumers. 
Exemption revocation requires the appropriate federal banking 
agency to agree with the Bureau's findings.

         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 italic, 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. 1022. RULEMAKING AUTHORITY.

  (a) In General.--The Bureau is authorized to exercise its 
authorities under Federal consumer financial law to administer, 
enforce, and otherwise implement the provisions of Federal 
consumer financial law.
  (b) Rulemaking, Orders, and Guidance.--
          (1) General authority.--The Director may prescribe 
        rules and issue orders and guidance, as may be 
        necessary or appropriate to enable the Bureau to 
        administer and carry out the purposes and objectives of 
        the Federal consumer financial laws, and to prevent 
        evasions thereof.
          (2) Standards for rulemaking.--In prescribing a rule 
        under the Federal consumer financial laws--
                  (A) the Bureau shall consider--
                          (i) the potential benefits and costs 
                        to consumers and covered persons, 
                        including the potential reduction of 
                        access by consumers to consumer 
                        financial products or services 
                        resulting from such rule; and
                          (ii) the impact of proposed rules on 
                        covered persons, as described in 
                        section 1026, and the impact on 
                        consumers in rural areas;
                  (B) the Bureau shall consult with the 
                appropriate prudential regulators or other 
                Federal agencies prior to proposing a rule and 
                during the comment process regarding 
                consistency with prudential, market, or 
                systemic objectives administered by such 
                agencies; and
                  (C) if, during the consultation process 
                described in subparagraph (B), a prudential 
                regulator provides the Bureau with a written 
                objection to the proposed rule of the Bureau or 
                a portion thereof, the Bureau shall include in 
                the adopting release a description of the 
                objection and the basis for the Bureau 
                decision, if any, regarding such objection, 
                except that nothing in this clause shall be 
                construed as altering or limiting the 
                procedures under section 1023 that may apply to 
                any rule prescribed by the Bureau.
          (3)  [Exemptions.--] General exemptions._
                  (A) In general.--The Bureau, by rule, may 
                conditionally or unconditionally exempt any 
                class of covered persons, service providers, or 
                consumer financial products or services, from 
                any provision of this title, or from any rule 
                issued under this title, as the Bureau 
                determines necessary or appropriate to carry 
                out the purposes and objectives of this title, 
                taking into consideration the factors in 
                subparagraph (B).
                  (B) Factors.--In issuing an exemption, as 
                permitted under subparagraph (A), the Bureau 
                shall, as appropriate, take into 
                consideration--
                          (i) the total assets of the class of 
                        covered persons;
                          (ii) the volume of transactions 
                        involving consumer financial products 
                        or services in which the class of 
                        covered persons engages; and
                          (iii) existing provisions of law 
                        which are applicable to the consumer 
                        financial product or service and the 
                        extent to which such provisions provide 
                        consumers with adequate protections.
          (4) Specific exemption for certain financial 
        institutions.--
                  (A) In general.--An insured depository 
                institution or credit union with less than 
                $50,000,000,000 in consolidated assets shall be 
                exempt from all rules and regulations issued by 
                the Bureau.
                  (B) Exception.--The Bureau may revoke an 
                exemption provided under subparagraph (A) with 
                respect to a specific rule or regulation and a 
                specific class of insured depository 
                institutions or credit unions described in 
                subparagraph (A) if--
                          (i) the Bureau makes a detailed, 
                        written finding that such class of 
                        insured depository institutions or 
                        credit unions described in subparagraph 
                        (A) has engaged in a pattern or 
                        practice of activities that have been 
                        detrimental to the interests of 
                        consumers and are of a type that the 
                        specific rule or regulation is intended 
                        to address;
                          (ii) the Bureau consults with the 
                        Federal banking agencies with respect 
                        to such revocation; and
                          (iii) each Federal banking agency 
                        provides the Bureau with a written 
                        notice stating that the Federal banking 
                        agency agrees with such revocation.
                  (C) Effective date; effect on prior rules.--
                          (i) Effective date.--This paragraph 
                        shall take effect with respect to rules 
                        and regulations issued or modified 
                        after the date of enactment of this 
                        paragraph.
                          (ii) Effect on prior rules.--This 
                        paragraph shall not prohibit the Bureau 
                        from modifying a rule or regulation 
                        issued prior to the date of enactment 
                        of this paragraph with respect to 
                        insured depository institutions or 
                        credit unions described in subparagraph 
                        (A) if the effect of such modification 
                        is to expand a current exemption or to 
                        reduce the costs and the regulatory 
                        burden associated with complying with 
                        such rule or regulation.
                  (D) Federal banking agency defined.--For 
                purposes of this paragraph, the term ``Federal 
                banking agency'' means the Board of Governors, 
                the Office of the Comptroller of the Currency, 
                the Corporation, and the National Credit Union 
                Administration.
          [(4)] (5) Exclusive rulemaking authority.--
                  (A) In general.--Notwithstanding any other 
                provisions of Federal law and except as 
                provided in section 1061(b)(5), to the extent 
                that a provision of Federal consumer financial 
                law authorizes the Bureau and another Federal 
                agency to issue regulations under that 
                provision of law for purposes of assuring 
                compliance with Federal consumer financial law 
                and any regulations thereunder, the Bureau 
                shall have the exclusive authority to prescribe 
                rules subject to those provisions of law.
                  (B) Deference.--Notwithstanding any power 
                granted to any Federal agency or to the Council 
                under this title, and subject to section 
                1061(b)(5)(E), the deference that a court 
                affords to the Bureau with respect to a 
                determination by the Bureau regarding the 
                meaning or interpretation of any provision of a 
                Federal consumer financial law shall be applied 
                as if the Bureau were the only agency 
                authorized to apply, enforce, interpret, or 
                administer the provisions of such Federal 
                consumer financial law.
  (c) Monitoring.--
          (1) In general.--In order to support its rulemaking 
        and other functions, the Bureau shall monitor for risks 
        to consumers in the offering or provision of consumer 
        financial products or services, including developments 
        in markets for such products or services.
          (2) Considerations.--In allocating its resources to 
        perform the monitoring required by this section, the 
        Bureau may consider, among other factors--
                  (A) likely risks and costs to consumers 
                associated with buying or using a type of 
                consumer financial product or service;
                  (B) understanding by consumers of the risks 
                of a type of consumer financial product or 
                service;
                  (C) the legal protections applicable to the 
                offering or provision of a consumer financial 
                product or service, including the extent to 
                which the law is likely to adequately protect 
                consumers;
                  (D) rates of growth in the offering or 
                provision of a consumer financial product or 
                service;
                  (E) the extent, if any, to which the risks of 
                a consumer financial product or service may 
                disproportionately affect traditionally 
                underserved consumers; or
                  (F) the types, number, and other pertinent 
                characteristics of covered persons that offer 
                or provide the consumer financial product or 
                service.
          (3) Significant findings.--
                  (A) In general.--The Bureau shall publish not 
                fewer than 1 report of significant findings of 
                its monitoring required by this subsection in 
                each calendar year, beginning with the first 
                calendar year that begins at least 1 year after 
                the designated transfer date.
                  (B) Confidential information.--The Bureau may 
                make public such information obtained by the 
                Bureau under this section as is in the public 
                interest, through aggregated reports or other 
                appropriate formats designed to protect 
                confidential information in accordance with 
                paragraphs (4), (6), (8), and (9).
          (4) Collection of information.--
                  (A) In general.--In conducting any monitoring 
                or assessment required by this section, the 
                Bureau shall have the authority to gather 
                information from time to time regarding the 
                organization, business conduct, markets, and 
                activities of covered persons and service 
                providers.
                  (B) Methodology.--In order to gather 
                information described in subparagraph (A), the 
                Bureau may--
                          (i) gather and compile information 
                        from a variety of sources, including 
                        examination reports concerning covered 
                        persons or service providers, consumer 
                        complaints, voluntary surveys and 
                        voluntary interviews of consumers, 
                        surveys and interviews with covered 
                        persons and service providers, and 
                        review of available databases; and
                          (ii) require covered persons and 
                        service providers participating in 
                        consumer financial services markets to 
                        file with the Bureau, under oath or 
                        otherwise, in such form and within such 
                        reasonable period of time as the Bureau 
                        may prescribe by rule or order, annual 
                        or special reports, or answers in 
                        writing to specific questions, 
                        furnishing information described in 
                        paragraph (4), as necessary for the 
                        Bureau to fulfill the monitoring, 
                        assessment, and reporting 
                        responsibilities imposed by Congress.
                  (C) Limitation.--The Bureau may not use its 
                authorities under this paragraph to obtain 
                records from covered persons and service 
                providers participating in consumer financial 
                services markets for purposes of gathering or 
                analyzing the personally identifiable financial 
                information of consumers.
          (5) Limited information gathering.--In order to 
        assess whether a nondepository is a covered person, as 
        defined in section 1002, the Bureau may require such 
        nondepository to file with the Bureau, under oath or 
        otherwise, in such form and within such reasonable 
        period of time as the Bureau may prescribe by rule or 
        order, annual or special reports, or answers in writing 
        to specific questions.
          (6) Confidentiality rules.--
                  (A) Rulemaking.--The Bureau shall prescribe 
                rules regarding the confidential treatment of 
                information obtained from persons in connection 
                with the exercise of its authorities under 
                Federal consumer financial law.
                  (B) Access by the bureau to reports of other 
                regulators.--
                          (i) Examination and financial 
                        condition reports.--Upon providing 
                        reasonable assurances of 
                        confidentiality, the Bureau shall have 
                        access to any report of examination or 
                        financial condition made by a 
                        prudential regulator or other Federal 
                        agency having jurisdiction over a 
                        covered person or service provider, and 
                        to all revisions made to any such 
                        report.
                          (ii) Provision of other reports to 
                        the bureau.--In addition to the reports 
                        described in clause (i), a prudential 
                        regulator or other Federal agency 
                        having jurisdiction over a covered 
                        person or service provider may, in its 
                        discretion, furnish to the Bureau any 
                        other report or other confidential 
                        supervisory information concerning any 
                        insured depository institution, credit 
                        union, or other entity examined by such 
                        agency under authority of any provision 
                        of Federal law.
                  (C) Access by other regulators to reports of 
                the bureau.--
                          (i) Examination reports.--Upon 
                        providing reasonable assurances of 
                        confidentiality, a prudential 
                        regulator, a State regulator, or any 
                        other Federal agency having 
                        jurisdiction over a covered person or 
                        service provider shall have access to 
                        any report of examination made by the 
                        Bureau with respect to such person, and 
                        to all revisions made to any such 
                        report.
                          (ii) Provision of other reports to 
                        other regulators.--In addition to the 
                        reports described in clause (i), the 
                        Bureau may, in its discretion, furnish 
                        to a prudential regulator or other 
                        agency having jurisdiction over a 
                        covered person or service provider any 
                        other report or other confidential 
                        supervisory information concerning such 
                        person examined by the Bureau under the 
                        authority of any other provision of 
                        Federal law.
          (7) Registration.--
                  (A) In general.--The Bureau may prescribe 
                rules regarding registration requirements 
                applicable to a covered person, other than an 
                insured depository institution, insured credit 
                union, or related person.
                  (B) Registration information.--Subject to 
                rules prescribed by the Bureau, the Bureau may 
                publicly disclose registration information to 
                facilitate the ability of consumers to identify 
                covered persons that are registered with the 
                Bureau.
                  (C) Consultation with state agencies.--In 
                developing and implementing registration 
                requirements under this paragraph, the Bureau 
                shall consult with State agencies regarding 
                requirements or systems (including coordinated 
                or combined systems for registration), where 
                appropriate.
          (8) Privacy considerations.--In collecting 
        information from any person, publicly releasing 
        information held by the Bureau, or requiring covered 
        persons to publicly report information, the Bureau 
        shall take steps to ensure that proprietary, personal, 
        or confidential consumer information that is protected 
        from public disclosure under section 552(b) or 552a of 
        title 5, United States Code, or any other provision of 
        law, is not made public under this title.
          (9) Consumer privacy.--
                  (A) In general.--The Bureau may not obtain 
                from a covered person or service provider any 
                personally identifiable financial information 
                about a consumer from the financial records of 
                the covered person or service provider, 
                except--
                          (i) if the financial records are 
                        reasonably described in a request by 
                        the Bureau and the consumer provides 
                        written permission for the disclosure 
                        of such information by the covered 
                        person or service provider to the 
                        Bureau; or
                          (ii) as may be specifically permitted 
                        or required under other applicable 
                        provisions of law and in accordance 
                        with the Right to Financial Privacy Act 
                        of 1978 (12 U.S.C. 3401 et seq.).
                  (B) Treatment of covered person or service 
                provider.--With respect to the application of 
                any provision of the Right to Financial Privacy 
                Act of 1978, to a disclosure by a covered 
                person or service provider subject to this 
                subsection, the covered person or service 
                provider shall be treated as if it were a 
                ``financial institution'', as defined in 
                section 1101 of that Act (12 U.S.C. 3401).
  (d) Assessment of Significant Rules.--
          (1) In general.--The Bureau shall conduct an 
        assessment of each significant rule or order adopted by 
        the Bureau under Federal consumer financial law. The 
        assessment shall address, among other relevant factors, 
        the effectiveness of the rule or order in meeting the 
        purposes and objectives of this title and the specific 
        goals stated by the Bureau. The assessment shall 
        reflect available evidence and any data that the Bureau 
        reasonably may collect.
          (2) Reports.--The Bureau shall publish a report of 
        its assessment under this subsection not later than 5 
        years after the effective date of the subject rule or 
        order.
          (3) Public comment required.--Before publishing a 
        report of its assessment, the Bureau shall invite 
        public comment on recommendations for modifying, 
        expanding, or eliminating the newly adopted significant 
        rule or order.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    H.R. 1264 would exempt depository institutions with less 
than $50 billion in assets, or over 99 percent of all banks and 
credit unions, from any new or modified consumer protection 
regulation issued by the Consumer Financial Protection Bureau 
(``Consumer Bureau''). Only under extremely limited 
circumstances, and with the written approval of all other 
federal prudential banking regulators--the Board of Governors 
of the Federal Reserve System (``Federal Reserve Board''), the 
Federal Deposit Insurance Corporation (``FDIC''), the Office of 
the Comptroller of the Currency (``OCC''), and the National 
Credit Union Administration (``NCUA'')--would the Consumer 
Bureau be able to revoke the exemption for a class of 
institutions with respect to a specific consumer protection 
regulation.
    Section 1022 of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (``Dodd-Frank Act'') established the 
Consumer Bureau, and granted it rulemaking authority for over 
20 major federal consumer financial protection laws, including 
the Equal Credit Opportunity Act, the Truth In Lending Act, and 
the Fair Credit Reporting Act. The same section of the Dodd-
Frank Act also provides the Consumer Bureau with discretion to 
tailor its rulemaking for smaller, rural, and community 
financial institutions.\1\ The Consumer Bureau has repeatedly 
exercised this authority to provide targeted regulatory relief 
when it is warranted. For example, the Consumer Bureau tailored 
its Ability-to-Repay and Qualified Mortgage Standards to 
provide carve-outs for small creditors in rural and underserved 
areas.
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    \1\12 U.S.C. Sec.  5512 (2010) ``The [Consumer Bureau] may 
conditionally or unconditionally exempt any class of covered persons, 
service providers, or consumer financial products or services, from any 
provision of this title, or from any rule issued under this title, as 
the Bureau determines necessary or appropriate to carry out the 
purposes and objectives of this title.''
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    However, H.R. 1264 would override the Dodd-Frank Act and 
take the unprecedented step of exempting all banks and credit 
unions with less than $50 billion in total assets from any 
updated or new federal consumer financial protection 
regulations. Nearly all of the nation's banks, and all but one 
credit union, would fall under the bill's exemption. The bill 
would provide a narrow exception to allow the Consumer Bureau 
to apply, or re-apply, a federal consumer financial protection 
regulation to some or all of these institutions, but only if 
the institution ``has engaged in a pattern or practice of 
activities that have been detrimental to the interests of 
consumers and are of a type that the specific rule or 
regulation is intended to address,'' and the application is 
approved by the Federal Reserve Board, FDIC, OCC and NCUA. If a 
single regulator vetoed the action, the depository institutions 
would continue to be exempt from the rule.
    Furthermore, the bill only adds to the extensive 
constraints that the Consumer Bureau's rulemaking authority is 
already subject to. Specifically, the Dodd-Frank Act 
establishes procedures that the Consumer Bureau must follow 
when proposing and prescribing rules, in addition to the notice 
of proposed rulemaking and comment period procedures required 
for informal rulemakings under the Administrative Procedure Act 
and other generally applicable federal administrative laws. For 
example, before proposing a rule as well as during the comment 
period of a proposed rule, the Consumer Bureau must consult 
with other appropriate financial regulators, and address any 
written objections by federal prudential banking regulators.
    At a time when banks are experiencing record growth and 
profitability and the Executive Branch has taken illegal 
actions to subvert the Consumer Bureau, this measure would 
further weaken oversight for consumer protection laws and 
regulations for almost all of our nation's banks. The Consumer 
Bureau is the only federal agency solely responsible for 
consumer protection in the financial sector, and this 
legislative proposal would severely hamper its ability to carry 
out its mission. H.R. 1264 impedes the Consumer Bureau's 
authority to protect consumers and regulate the banking 
industry. In no way can this be described as a targeted and 
reasonable approach.
    For these reasons, we oppose H.R. 1264.

                                   Maxine Waters.
                                   Nydia M. Velazquez.
                                   Carolyn B. Maloney.
                                   Joyce Beatty.
                                   Keith Ellison.

                                  [all]