May 6, 2010
As you debate financial reform, Consumers Union®, the nonprofit publishers of Consumer Reports®, strongly urges you to oppose Senator Shelby’s proposed amendment that would weaken the jurisdiction, powers, and resources of the Consumer Financial Protection Bureau (CFPB).
We continue to believe that a strong, independent consumer protection regulator is the best way to protect consumers from unsafe and harmful financial products. To be effective, the CFPB must have oversight of all financial products including all financing-related activities, primary and independent rule-writing, examination and enforcement authority for consumer laws, and a budget that allows it to carry out its mission. The CFPB must have the authority and resources to act fast to stop abusive market practices before they harm consumers and undermine our economy.
The Shelby amendment would undermine the effectiveness of the CFPB. Under the proposal, the CFPB would not be independent. It would be a division in the FDIC, and its rules would have to be approved by the FDIC before they became final. Resources for the CFPB would be severely limited; assessments would fund rule-writing but not enforcement activities. There would no enforcement authority over banks and other depository institutions, and supervision over non-mortgage companies would be require such companies to demonstrate a three-year pattern of breaking the law before the CFPB could take action.
The Shelby amendment would undermine consumer protection by creating a CFPB with no real powers or resources. We strongly urge you to vote against this amendment and all other amendments that would weaken the consumer protection provisions of S. 3217.
We look forward to working with you as the financial reform bill proceeds to final passage. If you have any questions, please contact Pamela Banks at (202) 462-6262 or Gail Hillebrand at (415) 431-6747.
Senior Policy Counsel