May 24, 2011
WASHINGTON, D.C. – The House Oversight Committee will hold a hearing later today on the Consumer Financial Protection Bureau (CFPB) in the latest effort by opponents of the agency to limit its authority. The CFPB is already subject to sufficient oversight and should not be hamstrung by any more constraints on its ability to protect consumers, according to Consumers Union, the nonprofit publisher of Consumer Reports.
“Current law already provides the needed balance on the CFPB’s authority without undermining its mission to serve as a watchdog for consumers,” said Pamela Banks, Senior Policy Counsel for Consumers Union. “If CFPB opponents get their way, consumers will end up with a lapdog that’s all bark and no bite.”
Under current law, any new rules adopted by the CFPB can be set aside by a two-thirds vote of the Financial Stability Oversight Council (made up of representatives of other banking agencies) if it determines that the rules put the stability of the financial system at risk. Other financial regulators are not subject to this kind of veto. In addition, the CFPB’s funding is already subject to a ceiling limit. No other financial regulator has this kind of statutory limit on its funding.
Earlier this month, the House Financial Services Committee approved bills that would make it easier for other financial regulators to nullify new CFPB rules, politicize the watchdog’s budget by subjecting it to the appropriations process, and create more bureaucracy by replacing its director with a five-member commission. Forty-four members of the Senate have signed a letter pledging to oppose any nominee to head the CFPB unless similar changes are made.
“Consumers deserve a watchdog that can take on shady loans, hidden bank fees, and the latest financial scams,” said Banks. “It’s time for Congress to let the CFPB do its job and stop putting the interests of the big banks and Wall Street over consumers.”
The CFPB was established as part of the Wall Street reform law last year to make sure that financial companies provide consumers with the information they need to understand the true costs and risks of different products. It has been charged with identifying and stopping unfair, deceptive, and abusive financial practices and keeping the rules governing financial service products up-to-date.
David Butler (dbutler@consumer.org) or Kara Kelber (kkelber@consumer.org) 202-462-6262 or Michael McCauley (mccami@consumer.org) 415-431-6747, ext 126