Is Time Finally up for the CFPB?

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Credits: Pinterest, What the Folly.

Movement by the House Financial Services Committee, led by Chairman Jeb Hensarling (R-TX), could spell the end for the Consumer Financial Protection Bureau as we know it.

According to ACA International, the committee debated the future of the Financial CHOICE Act during a hearing yesterday.

Originally introduced by Hensarling in 2016, the CHOICE Act included a proposal to replace the CFPB with a five-member bipartisan commission that would be subject to congressional oversight and appropriations.

The Financial CHOICE Act re-establishes this rogue agency as a civil enforcement agency, patterned after the Federal Trade Commission. One that is responsible for actually enforcing the enumerated consumer protection laws written by Congress, instead of making up its own law in an unfair, deceptive, and abusive manner,” said Hensarling.

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Jeb Hensarling. Credit: House.gov

True consumer protection is only to be had in competitive, transparent and innovative markets which are vigorously policed for fraud and deception. That’s what the Financial CHOICE Act is all about.”

Recently, Hensarling introduced a 593-page draft of the act, which included a number of revisions. One of them includes changing the name of the CFPB to the Consumer Law Enforcement Agency (CLEA), and a director would lead the agency along with a deputy director, who could be removed at will by the President.

The CLEA would also be required to receive funding through congressional appropriations for the agency.

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Credits: Housingwire, CFPB.

Under the new provisions, President Trump would have the authority to appoint an Inspector General for the organization no later than 60 days after the law takes effect. The inspector general would be required to testify at semi-annual hearings before the House Financial Services and Senate Banking Committees.

In the summary of the draft bill, the stated intention is to “create hope and opportunity for investors, consumers, and entrepreneurs by ending bailouts and ‘Too Big to Fail,’ holding Washington and Wall Street accountable, eliminating red tape to increase access to capital and credit, and repealing the provisions of the Dodd-Frank Act that make America less prosperous, less stable, and less free, and for other purposes.”

For critics of the CHOICE Act, and the dismantling of the CFPB, they see things differently.

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Representative Maxine Waters. Credit: Wikipedia

A number of law makers, including Rep. Maxine Waters (D-CA), argue that the act would remove consumer, business and investor financial protections and that the CFPB should not be dismantled and replaced with the CLEA.

Rep. Brad Sherman, (D-CA) says that bills included within the act should be voted on separately, with good reason.

These bills will pass this committee overwhelmingly if we consider them separately,” said Sherman.

As Daily Business News readers are aware, critics of the CFPB point to leadership structure, data collection and so-called “trophy wins” as issues that need to be addressed. A D.C. Circuit Court ruled that the CFPB was unconstitutional, in the case legal action brought by PHH.

The court ruled that the CFPB’s structure was constitutionally flawed and that its director should be removable at the will of the president.

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Credits: Flickr, CFPB, PHH.

The CFPB is an unaccountable federal agency, as exemplified in the case PHH Corp., et al. v. Consumer Financial Protection Bureau,” said Norbert Michel, senior research fellow, Financial Regulations and Monetary Policy Institute for Economic Freedom and Opportunity at The Heritage Foundation.

The PHH incident is a clear-cut case of an unaccountable federal agency flouting the basic principles of the rule of law. Private firms—financial or otherwise—cannot safely operate in such an environment without the expectation of being wrongly persecuted by the government that is supposed to protect all of its citizens from such actions.”

Congress can do even better by consolidating the various consumer financial protection statutes under one existing federal agency, such as the [Federal Trade Commission.]”

Another Texas Republican cut straight to the point.

The CFPB is one of the most unacceptable and unaccountable agencies in the United States,” said Rep. Roger Williams. “This is what Dodd-Frank gave us and that is why it is so important to fix this disastrous law.”

According to Bloomberg, a markup for the legislation is reportedly scheduled for May 2.

 

The View From the MH Industry

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Still from an Inside MH video, reflecting how Richard Cordray himself said that there was never much high cost lending in the manufactured housing industry market.

While the CFPB had the support of the Obama Administration, the Trump Administration has had the organization in its crosshairs since the election.

Those in the industry have not been shy about their feelings on the matter.

The information on this case also has indirect ramifications for the Manufactured Housing Institute (MHI), and others in the industry, as the Preserving Access bill is being floated, which would modify portions of Dodd-Frank.

For more on what the Preserving Access bill means for the industry, check out the latest article on The Masthead.

For more on the CFPB’s impact on the manufactured housing industry, click here. ##

 

(Image credits are as shown above, and when provided by third parties, are shared under fair use guidelines.)

 

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews