WEEK IN REVIEW
Washington,
March 18, 2016 -
Committee Challenges CFPB Director
CFPB Director Richard Cordray appeared before the committee on Wednesday, where he was confronted with questions about how the Bureau’s actions are harming the very consumers it is supposed to protect. Cordray faced tough questions on everything from the CFPB’s attempt to exceed its powers, to its extravagant building renovation, expected rule to restrict consumer access to short-term, small dollar loans, to regulatory relief for community financial institutions.
“The Director told the Consumer Bankers Association ‘when you push back, we welcome your input.’ The Director should expect continued and aggressive congressional push back to its continued use of regulation by enforcement,” said Financial Institutions and Consumer Credit Subcommittee Chairman Randy Neugebauer (R-TX).
The CFPB director “is neither elected nor accountable to the American people. Yet when it comes to consumer financial products, he is vested with the awesome power of the entire United States Congress. This is amazing, frightening and tragic,” said Chairman Jeb Hensarling (R-TX).
Rep. Steve Pearce (R-NM) challenged Director Cordray over the Bureau’s controversial plans to impose federal regulations on the short-term, small dollar loan market. “You're going after an industry and trying to shut them down," Rep. Pearce told the CFPB director.
Several members also questioned Director Cordray on the findings of the committee’s two staff reports regarding the CFPB’s attempt to regulate automobile dealers even though the Bureau is statutorily prohibited from regulating these businesses.
Oversight Hearing on FDIC’s ‘Abusive Tactics’
The Oversight and Investigations Subcommittee held a hearing on Wednesday to review an inspector general report detailing “abusive tactics” and “aggressive and unprecedented efforts” by the FDIC to force banks to stop offering consumers a loan product that is completely legal.
“The Inspector General’s report reveals a troubling pattern by FDIC officials of targeting legitimate and legal activities through abusive and unfair regulatory practices. I am concerned that the FDIC has repeatedly demonstrated a disregard for the rule of law, for the limitations of its own power and for the financial institutions that it is supposed to serve. This kind of behavior cannot and will not be tolerated by Congress and the American people who expect much more from their government,” said Chairman Duffy (R-WI).
“The FDIC needs to ask how the actions described in our report could unfold as they did, in light of the FDIC’s stated core values of integrity, accountability, and fairness,” Acting Inspector General Fred W. Gibson, Jr. said in his report of inquiry released to the House Financial Services Committee.
After failing to convince three supervised institutions to stop offering customers Refund Anticipation Loans (RALs) in 2009 and 2010, “the tenor of the FDIC’s supervisory approach became aggressive,” the Inspector General’s report said. The FDIC’s strong-arming tactics proved effective and, by April 2012, all three institutions had stopped offering RALs.
MEMBER SPOTLIGHTS
Rep. Sean Duffy |Where ‘The Big Short’ Fell Short in Explaining the Financial Crisis
You might have won a good chunk of change if you bet against “The Big Short” to take this year’s top prize at the Oscars. The odds were stacked in its favor to win Best Picture. But like the historically stable housing market before the Great Recession, the movie lost big and only a few lucky speculators might have seen it coming.
Rep. Marlin Stutzman |Consumer Financial Protection Bureau lacks oversight
Years into our so called economic "recovery," economists are beginning to whisper about the next recession. One of the main culprits behind the economy's weakness has been the slow creep of overregulation into every aspect of industry and daily life. Good government can help keep consumers safe from fraud and other scams, but when it comes to financial services, Consumer Financial Protection Bureau (CFPB) overregulation hurts the market, and thereby consumers, horribly.
Weekend Must Reads
The Hill | Expand options for flood insurance
By: Reps. Dennis Ross (R-FL) and Patrick Murphy (D-FL)
Our state of Florida is no stranger to catastrophic storms and devastating hurricanes. With 98 percent of Florida communities participating in the federal National Flood Insurance Program (NFIP), homeowners and business owners know firsthand the importance of purchasing flood insurance to protect their families and businesses from disaster.
Richmond Register |Rep. Barr: Poverty, not inequality is the problem
By: Rep. Andy Barr (R-KY)
“We’re going to make the sixth district great again,” U.S. Rep. Andy Barr, R-Sixth District, told a Richmond Chamber of Commerce luncheon Wednesday, borrowing the slogan of a current presidential candidate. After the laughter subsided, Barr said the nation and world are facing some serious challenges, but the House of Representatives under the leadership of Speaker Paul Ryan is preparing “some big solutions for big challenges.”
National Review | The CFPB Is a Great Example of Why People Feel Powerless
Tomorrow, Consumer Financial Protection Bureau Director Richard Cordray takes the stand at a House Financial Services Committee hearing. He deserves to be hauled over the coals, because his and his agency’s behavior are some of the reasons people feel so powerless in the face of the nation’s elites.
Investor’s Business Daily |Obama Regulators Sharpen Focus On Small-Business Lending, Worrying Banks
Regulation: Opening a new front in its phony war on bank bias, the Consumer Financial Protection Bureau warns that a top priority over the next two years is cracking down on small-business lenders for “fair lending compliance.”
On the Horizon
Tuesday, March 22, 2016 at 10:00 A.M.
Full Committee
“The Annual Testimony of the Secretary of the Treasury on the State of the International Financial System”
Tuesday, March 22, 2016 at 2:00 P.M.
Housing and Insurance Subcommittee
“The Future of Housing in America: Government Regulations and the High Cost of Housing”
In the News
WSJ | Rep. Hensarling Unveils Fresh Plan to Revamp Dodd-Frank
New York Times| House Republicans Clash With Consumer Protection Unit Chief
Morning Consult | Hensarling Torches $186 Million Transfer to Housing Trust Fund
Credit Union Times | Cordray Discusses Credit Union Exemption
Housing Wire | CFPB Director Cordray: Credit unions misrepresent mortgage success
Bloomberg Business Consumer Bureau's Cordray Jousts With Republicans Over Ally Deal
American Banker | Cordray Receives Semiannual Upbraiding from Republicans
WSJ | ‘Abusive’ Attitude at FDIC Prompted Banks to Drop Tax-Refund Loans
PYMNTS | CFPB Director’s Semi-Annual Report Sparks Debate
National Mortgage Professional Magazine | Whose CFPB Is It, Anyway ... Cordray-Hensarling Square-Off on Capitol Hill
American Banker| Lawmakers Troubled by FDIC's Supervisory Treatment of Banks
