At a Financial Services Committee markup of six bills designed to undermine the Consumer Financial Protection Bureau (CFPB), Congresswoman Maxine Waters
(D-CA), Ranking Member of the Committee, blasted the measures as efforts to weaken CFPB’s ability to be an effective, independent advocate for consumers.
Waters highlighted the CFPB’s remarkable record of success in just over two years, pointing to enforcement actions that have resulted in $750 million being directly refunded to over 7.9 million consumers. She also expressed her strong opposition to the legislation considered today, which would make drastic changes that weaken the Bureau by, for example, eliminating the position of Director; hurting its ability to recruit top talent; ending CFPB’s independent funding stream; making it easier for CFPB rulings to be overturned; and placing onerous burdens on CFPB’s ability to access and analyze aggregate data.
Her full opening remarks are below.
As prepared for delivery:
Today, this Committee considers legislative proposals purportedly designed to “reform” the Consumer Financial Protection Bureau. But behind this smoke screen, we all know the true purpose of this hearing is to give my Republican colleagues another chance to push for legislation to dismantle an effective and important agency by undermining its leadership, autonomy, and funding.
In just two years, the CFPB has already achieved significant success for American consumers. The CFPB’s enforcement actions have resulted in $750 million being directly refunded to over 7.9 million consumers, who were victimized by unscrupulous actors in the financial system.
The CFPB is also monitoring industries that had previously escaped regular federal oversight, including nationwide consumer reporting agencies, large debt collectors, and payday lenders, just to name a few.
The CFPB has finalized numerous mortgage rules to provide much needed protection to American consumers from irresponsible lenders. Among other things, these rules will protect homeowners facing foreclosure, and prevent lenders from steering home buyers into risky mortgages.
Despite the demonstrated success of CFPB in formulating well-balanced regulations that are responsive to industry concerns yet enhance consumer protections, my Republicans colleagues continue to seek to dismantle the CFPB.
I fear – as should the American public – that without this vital agency on the beat, unscrupulous financial practices will continue unhindered. It is clear that the six bills the Committee will discuss today are not part of a serious effort to improve the CFPB. To the contrary, they are redundant and careless – part of an unrealistic and ideological quest to undercut the agency.
The proposals we will discuss today would weaken CFPB’s ability to be an effective, independent advocate for consumers. HR 2446 would eliminate the position of Director in favor of a commission, likely hampering any efforts by the agency to quickly respond to industry and consumer concerns. The bill would also require the President to find four more nominees likely to be filibustered by a broken Senate before the agency is up and running again.
HR 3519 aims to end CFPB’s independent funding – and instead subject it to the political interference and funding lapses associated with the Congressional appropriations process.
This practice would apply a different funding stream than other bank regulators, including the Federal Reserve, the OCC, and the FDIC. To be successful, it is imperative that all of these agencies are able to function without fearing that political polarization will cause them to shutter their doors at the whim of Congress. The CFPB is no different.
A recent reminder of the danger of subjecting the CFPB to the appropriations process is the 16 day shutdown of the Federal government. I ask my Republican colleagues, are our memories so short that we cannot remember the adverse impact this shutdown had on our economy and the danger it could have posed to the stability of our financial markets, if the banking regulators were unable to continue to perform their duties?
HR 2385 would require that Bureau employees be compensated according to the General Schedule. This would severely undermine the agency’s ability to hire and retain qualified staff – which is exactly why every other financial regulator is able to offer pay and benefits that are higher than the General Schedule.
If the pay at the Consumer Protection agency is inferior to that of other regulators, it is only the consumers who will be harmed.
HR 3193 would reduce the number of votes necessary for the Financial Stability Oversight Council to overturn Bureau regulations. No other agency’s rulemaking can be overturned by other regulators, and by lowering the threshold to just 5 votes to overturn agency rulemaking, this bill would recreate the primary issue the CFPB was born to address -- consumer protection taking a back seat to prudential regulation. It’s exactly this kind of thinking that led to the financial crisis of 2008.
The other proposals before us today – HR 2571 and HR 3183 – would place onerous burdens on CFPB’s ability to access and analyze the aggregate data the Bureau needs to do its job, with no apparent benefit for consumers. And they would do this despite the fact that banks and other service providers have access to this same information. At the same time that some are questioning the potential negative impact that the CFPB could have on industry, they want to take away one of its most important tools— the ability to gather the data needed to understand and respond to the wide array of consumer products and services and provide smart and targeted regulation.
I strongly support the important work of the CFPB, and I congratulate the Bureau for its impressive record of accomplishment for American consumers. I urge members to oppose the bills before us today that would weaken the agency and put American Consumers at risk. Thank you, Mr. Chairman, and I yield back the balance of my time.