By Selina Stoller, Summit AmeriFirst Holdings, LLC
A new bill aims to dismantle the powers of the independent watchdog, the Consumer Financial Protection Bureau.
Founded six years ago, the CFPB’s objective is to enforce consumer protection laws and has authority over businesses that sell financial products and services, including banks, credit card companies, mortgage lenders, auto loan lenders, debt collectors, and credit bureaus.
So far, it has returned almost $12 billion dollars to 29 million consumers and imposed about $600 million in civil penalties.
Now, the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumer and Entrepreneurs) Act could change the CFPB entirely.
This bill is aimed at eliminating financial regulations put in place in 2010 by the Dodd-Frank Wall Street Reform and Consumer Protection Act following the Great Recession of 2008. Mainly, it would get rid of the agency’s authority to regulate large banks and payday lenders, eliminate independent funding from the Federal Reserve Bank, and remove the power to prosecute companies that engage in unfair acts or practices, among other things.
Supporters believe that the Financial CHOICE Act will undo the regulatory burdens put in place by the Obama administration that have hurt financial service companies. It could also provide Congress with much needed oversight.
Rep. Jeb Hensarling (R-Texas), chairman of the Financial Services Committee and author of the CHOICE Act, said that, “American consumers need competitive markets and a ‘cop on the beat’ to protect them from fraud and deception. They don’t need Washington elites trampling on their freedom of choice and picking their financial products for them.”
However, consumer advocates insist that the bill would eliminate the CFPB’s independence, greatly reduce its ability to regulate, and potentially leave consumers vulnerable to financial scams and schemes. Some even argue that the CHOICE Act would make mortgages, student loans, and small business loans costlier.
The fate of the bill will be determined after it heads to the House floor in the next few weeks.
- 8 Jun, 2017
- Josh Smith