WEEK IN REVIEW
April 7, 2017 -
Unconstitutional CFPB ‘Asleep at the Wheel’ on Wells Fargo
Republican members of the committee made the case at a hearing on Wednesday that the Consumer Financial Protection Bureau (CFPB) has harmed consumers, violated due process, failed to comply with congressional subpoenas, and was negligent in investigating Wells Fargo’s sales practices.
“The CFPB began an investigation into Wells Fargo only after the bank contacted the agency and the Los Angeles city attorney had filed a civil complaint, according to documents released by the House Financial Services Committee,” Politico Pro reported in its coverage of the hearing.
The Morning Consult reported that Republicans released “previously undisclosed documents they say contradict [Cordray’s] timeline of the agency’s investigation of Wells Fargo & Co.’s consumer fraud scandal.”
“The CFPB was asleep at the wheel!” said Oversight and Investigations Subcommittee Chairman Ann Wagner (R-MO), reported Reuters, noting that “the earliest the committee could determine the CFPB began to examine Wells Fargo was in May 2015, after the bank notified the regulator that the Los Angeles City Attorney was already pursuing a civil case, she said.”
“There is no greater form of consumer protection than fostering competitive, innovative and transparent markets and then vigorously policing them for fraud, theft and deception,” said Chairman Jeb Hensarling (R-TX). “What is clear, though, is that under Mr. Cordray’s leadership the CFPB has shown an utter disregard for protecting markets and has made credit more expensive and less available in many instances. This is particularly true for low and moderate income Americans.”
For more on the hearing, please visit the committee’s blog.
Bipartisan Bills Pass House
The House overwhelmingly approved two bipartisan bills this week that were sponsored by members of the committee.
The Encouraging Employee Ownership Act of 2017, sponsored by Rep. Randy Hultgren (R-IL), passed 331-87, and the Supporting America’s Innovators Act, sponsored by Rep. Patrick McHenry (R-NC), was approved 417-3.
The Encouraging Employee Ownership Act updates a nearly 20-year old Securities and Exchange Commission rule that inhibits employee ownership opportunities. The bill “would make it easier for companies in Illinois and nationwide to let hardworking employees own a stake in the business they pour their sweat into every day,” said Rep. Hultgren.
The Supporting America’s Innovators Act eliminates a significant barrier facing small businesses and startups by amending a nearly 80-year old rule to increase the investor limitation from 100 to 250 people for qualifying venture capital funds.
“The Supporting America’s Innovators Act is a common sense bill that will remove needless and outdated regulations replacing them with a regulatory framework that will encourage the growth of innovative forms of capital formation, which help businesses grow and create jobs,” said Rep. McHenry, who serves as Vice Chair of the committee.
Subcommittee Discusses a More Reliable Governance Structure for the Fed
The Monetary Policy and Trade Subcommittee held a hearing on Tuesday to examine the impact the Federal Reserve’s mandate and governance structure are having on the economy. “Unsustainable spending of other peoples’ money, coupled with the most interventionist of monetary policies, left us with a persistent economic funk. The answer cannot lie with doing even more of the same,” said Chairman Andy Barr (R-KY).
Joint Subcommittee Hearing Examines Iran Sanctions
The Monetary Policy and Trade Subcommittee and the Terrorism and Illicit Finance Subcommittee held a joint hearing on Tuesday to examine the effectiveness of non-nuclear U.S. sanctions on the Islamic Republic of Iran.
“Today’s joint hearing made it clear that the current non-nuclear sanctions have not been effective in deterring Iran’s illicit behavior. We must do more to stop Iran’s support of terrorism, weapons procurement and testing, and regional destabilization. As the Chairman of the Monetary Policy and Trade Subcommittee, I look forward to continuing our work to make these sanctions more effective in undermining Iran’s capabilities and to influence Iranian policies.” said Monetary Policy and Trade Subcommittee Chairman Andy Barr (R-KY).
Terrorism and Illicit Finance Subcommittee Chairman Steve Pearce (R-NM) added, “Today’s joint subcommittee hearing began a much needed conversation to assess the current state of Iran’s non-nuclear sanctions. Despite our nation’s best efforts to cut off Iran’s funds and supplies, Iran has continued to grow as the global leader in terror financing and aid. This is one of many hearings to come for the Subcommittee on Terrorism and Illicit Finance, as we work to interrupt the financial support of national security threats.”
Lack of Clarity and Due Process Hinders Firms’ Ability to Operate
The Financial Institutions and Consumer Credit Subcommittee held a hearing on Thursday on the need to increase transparency in the financial regulatory system and examined opportunities for reform.
“Financial companies are standing on regulatory quicksand, having to constantly shift in an effort to stay afloat. There are unending attempts to decipher a regulator’s wants and needs, allowing little to no foundation on which to run a business,” said Chairman Blaine Luetkemeyer (R-MO). “Ultimately, this world of ambiguous guidance, contradictory rules, and aggressive enforcement has led to confusion for financial companies seeking to comply with Dodd-Frank and other Obama-era rules. But the greatest impact is on the customers of those financial companies, who in many cases have been left clamoring for access to financial services, and paying more for the ones they’ve been able to retain.”
Rep. Dennis Ross (R-FL) | Time to Hold the CFPB Accountable
Since I was first elected to Congress, I have fought to hold government agencies and Washington bureaucrats more accountable to Floridians and all Americans. Unfortunately, the Consumer Financial Protection Bureau continues to operate in a manner unaccountable to Congress, the president and American taxpayers.
Rep. Andy Barr (R-KY) |Competition and Choice Are the Best Consumer Protections
The Consumer Financial Protection Bureau has a nice sounding name and a worthwhile mission, but its structure is fundamentally flawed. In fact, a United States court ruled its structure was unconstitutional and went on to say that, “other than the President, the Director of the CFPB is the single most powerful official in the entire United States Government.”
Rep. Scott Tipton (R-CO)| Consumer Bureau Needs Checks and Balances
The core mission of the bureau -- protecting consumers from bad actors -- is important, but we should all be concerned about the unconstitutional structure of the bureau.
Weekend Must Reads
Independent Journal Review | Washington's Worst Government Agency: The Consumer Financial Protection Bureau
Washington, D.C. is known for many things: Majestic monuments, smoky steakhouses, and wasteful bureaucracy at its worst. From the Environmental Protection Agency's crippling regulations to the Pentagon's $125 billion boondoggle, the swamp is full of critters. But no government agency is creepier or crawlier than the Consumer Financial Protection Bureau.
Star-Tribune | Agency’s one-size-fits-all diktats ignore reality
The Consumer Financial Protection Bureau is accountable to neither Congress nor the White House. The CFPB has churned out a flow of new financial regulations so complex and overwhelming that the bureau is ultimately harming those it is charged with protecting — individual consumers.
Daily Miner | One part of Dodd-Frank that’s hurting consumers
If I had a dollar for every time a politician tried to push something through Congress they said would protect consumers, I probably would have back all the dollars these efforts have cost me over the years. Somehow things never seem to line up the way they’re promised and we all pay the price.
In the News
Wall Street Journal | House Approves Bill to Ease Employee Stock Rules
USA Today | Alarm raised over 'suspicious trading' in Navient shares
Morning Consult | Republicans Build Case Against CFPB’s Cordray, Cite Wells Fargo Scandal
Politico Pro | Powell takes the reins as Fed regulatory czar
Reuters | Federal Reserve inconsistent in monitoring big banks: auditors
Wall Street Journal | Fed’s Lacker Resigns Over Leak, Dealing Blow to Bank’s Credibility
New York Post | Trump working on ‘horrendous’ Dodd-Frank regulations