Update on Legislation Affecting the CFPB
April 2, 2015
The House Financial Services Committee approved a bill that would create a small business advisory board at the Consumer Financial Protection Bureau (CFPB), while legislation was introduced in the Senate that would require a 10-year regulatory review of the bureau and the Dodd-Frank Act. ALTA supports both pieces of legislation.
During a markup period, the House Financial Services Committee approved H.R. 1195, the Bureau of Consumer Financial Protection Advisory Boards Act, with a 53-5 vote. The bill, introduced by Reps. Robert Pittenger (R-N.C.) and Denny Heck (D-Wash.), will establish a permanent small business advisory board at the bureau while also codifying advisory boards already in place for outreach to community banks and credit unions.
The small business advisory board will allow small businesses to advise the bureau throughout the regulatory process to ensure the bureau does not overlook their needs.
"The pendulum of regulation has swung too far, and too often, small businesses, credit unions, and community banks are the collateral damage," Pittenger said. "Small businesses can't access capital to create new jobs if their bankers are hiring compliance specialists instead of loan officers. This bipartisan legislation will ensure that CFPB regulators aren't just listening to high-priced lawyers and lobbyists, but are actively engaged with the small business owners, community banks, and credit unions that are vital for job creation and Main Street growth."
Meanwhile, Sen. Mike Crapo (R-Idaho) introduced legislation that would subject the CFPB and the Dodd-Frank Act to a 10-year regulatory review. Currently, both the CFPB and the Dodd-Frank Act are not eligible for such a review. This bill would expand the regulatory review process and would establish uniform standards for federal examinations of financial institutions.
According to Crapo, the inability to review the CFPB to consider how to reduce the regulatory burden on financial institutions has discouraged the formation of new small banks and credit unions.
"Rather than predetermine which rules should or should not be reviewed, this legislation will require the federal financial regulators to review all existing regulations, including Dodd-Frank and CFPB rules," Crapo said. "Crushed under an ever-increasing regulatory burden, this review is only meaningful if we identify the biggest challenges for community banks and credit unions and provide real solutions."
ALTA will continue to monitor the progress of these bills. If you have any question, contact Ben Lincoln, ALTA's director of government affairs, at [email protected].
Contact ALTA at 202-296-3671 or [email protected].