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House Committee vote threatens consumer watchdog

CU urges House Financial Services Committee to reject bills that weaken the CFPB

May 12, 2011

Consumers Union Urges House Financial Services Committee
to Oppose Efforts to Undermine the CFPB

Committee to Vote on Bills Today That Weaken New Consumer Watchdog

WASHINGTON, D.C. – The congressional attack on the Consumer Financial Protection Bureau (CFPB) will heat up today as the House Financial Services Committee votes on a number of bills that would weaken the consumer watchdog. Consumers Union, the nonprofit publisher of Consumer Reports, sent a letter to the Committee urging its members to reject legislation that would hamstring the CFPB’s ability to protect consumers.

“Congress shouldn’t put this new consumer watchdog on a short leash,” said Pamela Banks, Senior Policy Counsel for Consumers Union. “American families have already paid a steep price for years of lax federal oversight of abusive financial practices. These bills would make it harder for the CFPB to take action against hidden bank fees, shady loans, and other financial rip-offs.”

The House Financial Services Committee will consider three bills today that would undermine the CFPB’s ability to rein in abusive financial practices. HR 1121, sponsored by Representative Spencer Bachus (AL) would replace the CFPB’s director with a five-member commission. Doing so would slow down the CFPB’s decision making process with an unnecessarily complicated bureaucratic structure and make it more prone to internal discord, according to Consumers Union.

HR 1315, sponsored by Representative Sean Duffy (WI), would make it easier for other banking regulators to veto new rules developed by the CFPB. Right now, the Financial Stability Oversight Council (made up of representatives of other banking agencies) can set aside new rules developed by the CFPB with a two-thirds vote. Under the bill, a simple majority vote would nullify new CFPB rules.

Finally, HR 1667, sponsored by Representative Shelley Moore Capito (WV), would postpone the date that the CFPB gets its full powers until it has a director in place. Delaying the transfer date until Senate confirmation of a director would unduly politicize and delay the operations of the CFPB.

In addition, last week 44 Senators pledged to vote against any nominee to head up the CFPB unless the President agrees to similar changes that would ultimately limit its ability to protect consumers.

“Opponents of the CFPB are out to handcuff the CFPB before it even gets to work,” said Banks. “These measures were already considered and rejected by Congress last year because they would have severely undermined the ability of the CFPB to fulfill its mission. Opponents of reform are just trying to cripple an agency they never supported in the first place.”

For more information on Consumers Union’s efforts to support the CFPB, see www.DefendYourDollars.org

David Butler or Kara Kelber: 202-462-6262; or Michael McCauley: 415-431-6747, ext 126