Ed's Blog

House Launches Frenzy of Attacks on CFPB, Public Protections

By Ed Mierzwinski
Consumer Program Director

Today and tomorrow the House floor showcases a variety of special-interest backed bills designed to eliminate public protections and weaken financial reform. Action starts soon with an attempt to override the President's veto of legislation to wipe away a new Department of Labor rule designed to protect hard-earned retirement savings from Wall Streeters seeking their "share" of your own share. Then, the House will consider the massive FSGG Appropriations bill, which rolls back the independence and authority of the CFPB and other financial reforms. Finally, they've teed up a bill to eliminate the Supreme Court's long-standing "Chevron doctrine," which says that courts must defer to expert agencies in certain circumstances. Without the doctrine in place, polluters and wrongdoers will have more opportunities to challenge public protections.

We've joined other leading groups (we're on the sign-on list near the bottom) to oppose HJ Res 88 to override the President's veto of the Labor Department's "Best Interest rule," which requires retirement savings advisors to have a fiduciary duty to consumers. A vote is expected Wednesday afternoon. The Senate is not expected to join the required two-House override of the veto.

We've joined other members of the Coalition for Sensible Safeguards to oppose HR 4768, the so-called Separation of Powers Act. The bill rescinds the Supreme Court's Chevron doctrine, which requires judicial deference to expert agencies in certain circumstances. We have a group letter to be posted soon, but this is from the CSS letter:

"In practice, abolishing Chevron deference will make the current problems in our country’s broken regulatory process much worse in several ways. H.R. 4768 will lead to even more regulatory delays, particularly for those “economically significant” or “major” new rules that provide the greatest benefits to the public’s health, safety, and financial security. The examples of regulatory paralysis are ubiquitous and impossible to ignore.

  • In the energy sector, offshore drilling safety measures to address the cause of the BP oil spill in the Gulf, new safety standards to prevent oil train derailments and explosions, and new energy efficiency standards to benefit consumers all took far too long to finalize and benefit the public.
  • In the food safety sector, implementation of the Food Safety Modernization Act was finally completed last week, despite agencies missing every statutory deadline and numerous tainted food scandals in the interim.
  • In the banking sector, a significant portion of the Dodd-Frank Wall Street Reform Act has yet to be finalized, or in some cases, even proposed, despite the law’s enactment almost six years ago."

Finally, in the main ring, we have the HR 5485, the Financial Services and General Government Appropriations (FSGG) Bill. We urge opposition to the bill, which does not adequately fund government agencies. However, worse than that, as passed by committee, it includes numerous dubious, dangerous policy riders. For example, it would make the Consumer Financial Protection Bureau (CFPB) our only banking regulator without independent funding, even though others have had it since 1864 to protect the agencies -- and our financial system and economy -- from political interference. A separate rider would eliminate the bureau's single-director structure and replace it with a commission which could be dominated by industry-backed appointees. A variety of other riders would further delay important CFPB efforts to regulate high-cost predatory payday and auto title lending and to eliminate the insertion of onerous bans on joining class actions into arbitration clauses included in financial product contracts. Other already-included riders would strike at the safety-and-soundness reforms of the Dodd-Frank Wall Street Reform and Consumer Protection Act, including to gut the powers of its Financial Stability Oversight Board (FSOC) designed to coordinate the eforts of regulators to prevent another collapse as we had in 2008. The bill would also weaken the authority of the Securities and Exchange Commission to protect investors.

We support amendments to ameliorate these provisions, such as #48, #49, and #50, to strike the CFPB riders, but urge a no vote on final passage even if the positive amendments prevail. Of course we also oppose further weakening amendments. Here is the White House Statement of Administration Policy opposing the bill.  We concur with the detailed provisions of this letter from the PIRG-backed Americans for Financial Reform.

Excerpt from AFR:

"At the end of last year, Congress rejected multiple efforts to use the budget process to force through unrelated ideological riders, including changes in financial regulation that would undermine consumer protections, endanger financial security, or reduce accountability for large financial institutions. Again this year, a broad coalition of 255 organizations has weighed in to oppose riders in appropriations bills that would undermine financial reform. Unfortunately, the Appropriations Committee draft of the Financial Services and General Government Appropriations Act is nevertheless loaded with ideological policy riders, and numerous additional such riders aimed at weakening Wall Street oversight and consumer protection have been offered as amendments."

DEFEND THE CFPB

Tell your representative to oppose the “Financial CHOICE Act,” which would gut Wall Street reforms and destroy the Consumer Financial Protection Bureau as we know it.

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