Patrick McHenryChairman

WASHINGTON, October 22, 2009 -

- During consideration of H.R. 3126, legislation to create a so-called Consumer Financial Protection Agency, Democrats on the House Financial Services Committee rejected an amendment offered by Congressmen Don Manzullo (R-IL) and Leonard Lance (R-NJ) to limit  the CFPA's authority to impose fees and assessments on individuals and businesses covered by the agency.  Instead of providing the CFPA with unfettered power to exploit these hidden taxes, the Manzullo-Lance amendment would subject the CFPA to greater oversight by Congress. This approach would keep Congress engaged in supervising the CFPA to ensure it is not wasting taxpayer money or strangling the economy with unnecessary regulations. 

Democrats voted to give extraordinary authority to the CFPA to impose a tax on individuals and businesses covered by the Agency, including thousands of small businesses with little to no congressional oversight. Ultimately, consumers will pay an indirect tax through higher fees due to the costs associated with this legislation, including assessments to fund the new bureaucracy, higher compliance fees, and litigation costs.

In addition to increasing hidden taxes on small businesses and indirectly taxing consumers, Democrats also imposed a public tax by allowing the transfer as much as $400 million from the accounts of the Federal Reserve Board to fund this massive new government bureaucracy. Earnings from investments held by the Federal Reserve that surpass the system's expenses are currently transferred to the Treasury Department's general fund, so taking 10 percent of this money to the coffers of the new Agency is no different than taxing the public.

The vote on the amendment was 28-38.