Banking and Finance Law Daily House passes Consumers First Act which would affect CFPB mission, powers
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Thursday, May 23, 2019

House passes Consumers First Act which would affect CFPB mission, powers

By Colleen M. Svelnis, J.D.

In a partisan vote, the House has passed H.R. 1500, the Consumers First Act, which looks to restore changes made to the CFPB by the Trump Administration and reaffirm the Bureau’s original mission.

The House of Representatives has passed legislation affecting the mission and organization of the Consumer Financial Protection Bureau. The Consumers First Act (H.R. 1500) was introduced by Rep. Maxine Waters (D-Calif) to block the Trump Administration’s agenda for the Bureau, and "reverse their past efforts to undermine the mission" of the CFPB. H.R. 1500 passed the House of Representatives by a voteof 231-191 with no Republicans voting for the bill. The House also adopted 14 amendments, while four amendments offered by Republicans were not passed.

Waters, Chair of the Financial Services Committee, spoke in support of the bill, describing how the Bureau worked under the leadership of former Director Richard Cordray. Waters praised the efforts of the agency under Cordray, which "put nearly $12 billion back in the pockets of over 30 million consumers who were harmed by financial institutions." Waters stated that she introduced the Consumers First Act "to fix the damage that Mulvaney caused" at the Bureau. According to Waters, H.R. 1500 restores the CFPB "so it can carry out its mission of protecting consumers from unfair, deceptive or abusive acts or practices by financial institutions."

According to Waters, over 50 consumer, civil rights, and labor organizations support the Consumers First Act. Waters stated that H.R. 1500 would require the following actions at the CFPB:

  • restore supervisory enforcement powers to the Office of Fair Lending and Equal Opportunity;
  • restore and strengthen the Consumer Advisory Board to ensure consumer are heard by the agency’s leadership;
  • limit the number of political appointees at the agency;
  • direct the Bureau to resume supervising its regulated entities for compliance with the Military Lending Act; and
  • require that the consumer complaint database remain publicly accessible so that there is transparency about the complaints consumers are making about financial institutions.

The Trump Administration opposes the bill, issuing a statement that "H.R. 1500 promotes a partisan policy agenda and sets a precedent for dictating the agendas of the independent regulators" (see Banking and Finance Law Daily, May 22, 2019).

House Majority Leader Steny H. Hoyer (D-Md) spoke in support of the bill, saying that when Congress created the CFPB in the wake of the financial crisis, "the clear intention" was to launch an agency to be an "independent guardian for American consumers of financial products." He accused the Trump administration of beginning a "process of subverting the agency’s independence."

Financial Services Committee member Rep. Patrick McHenry (R-NC) spoke in opposition of the bill, which he said ignores the "fundamental flaw" of the CFPB, its unaccountability. McHenry stated that H.R. 1500 "proves what Republicans have said since the passage of Dodd-Frank: the Consumer Financial Protection Bureau is unaccountable." McHenry chided House Democrats for putting "politics ahead of consumers." He stated that the legislation does nothing to create a more responsible CFPB over the long-term.

Representative Cynthia Axne (D-Iowa) issued a statement that the bill would protect students and active duty military from predatory lending practices. Axne explained how H.R. 1500 would direct the CFPB to re-establish offices dedicated to protecting student borrowers and require the CFPB to resume their examinations to protect active duty military from unscrupulous lenders. The Consumer First Act would reinstate the recently disbanded Office of Students and Young Consumers, which is solely dedicated to protecting student loan borrowers. Additionally, Axne pointed out that The Consumer First Act would require the CFPB supervise lending practices. "The Military Lending Act serves a crucial role in protecting our servicemembers and their families from predatory lending practices, and we should be doing everything we can to protect them," stated Axne.

Representative Andy Barr (R-Ky) offered an amendment to H.R. 1500 which would grant the CFPB the statutory authority to assist the Department of Defense with supervising financial institutions to ensure they comply with the Military Lending Act. According to Barr, H.R. 1500 "only mentions the need to supervise for MLA, but does not include language to amend the statute to allow the CFPB to do so." The amendment was not passed. Barr called H.R. 1500 "nothing more than a political messaging bill that highlights the lack of oversight Congress has over the CFPB while failing to make any reforms to the structure."

Representative Jesús "Chuy" García (D-Ill) accused the Trump Administration of "systematically dismantling the CFPB." Stating that "every day has been an assault" against the consumer protections instituted in the Dodd-Frank Act, Garcia warned that the administration has reversed protections against payday lending and predatory student, auto and home loans. According to Garcia, "Instead of protecting consumers, Trump has been putting banks over people and businesses over consumers."

MainStory: TopStory CFPB ConsumerCredit DoddFrankAct EqualCreditOpportunity Loans OversightInvestigations SCRA

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