A report prepared by the Democratic staff of the House Financial Services Committee takes aim at Republicans for “attempt[ing] to ensure that the country reverts back to a big bank-oriented regulatory environment and to ‘functionally terminate’ the [CFPB].”
After recounting the 2008 financial crisis that led to the CFPB’s creation and lauding various regulatory, supervisory, and enforcement actions taken by “the highly successful Consumer Bureau,” the report describes Republican efforts to “undermine” the CFPB, including through the Financial CHOICE Act (which the report refers to as the “Wrong Choice Act”) and appropriations bills.
The report uses the CFPB’s issuance of the final arbitration rule and “the significant pushback received from Republicans in Congress and Acting OCC Comptroller Keith A. Noreika” as a “case study” that illustrates “the importance of having an independent Federal agency, dedicated to ensuring that consumer financial markets are fair, transparent, and competitive.” The report describes Republican plans to use the Congressional Review Act to override the rule (which are moving forward with the House’s passage yesterday of H.J. Res. 111) and the letters exchanged between CFPB Director Cordray and Acting Comptroller Noreika about OCC concerns regarding the rule’s impact on the safety and soundness of the U.S. banking system.
The report labels those concerns “disingenuous” and characterizes the Acting Comptroller’s July 10 letter to Director Cordray as “a misguided ‘Hail Mary” tactic to [attempt to use the Financial Stability Oversight Council] to overturn the final rule.” The report (perhaps signaling what will be a Democratic “talking point” to build public support for the rule) also claims that because Acting Comptroller Noreika defended the use of arbitration agreements when he was in private practice, his “persistence…in attempting to block the Consumer Bureau is not shocking.” According to the report, he “is now trying to nationalize his prior tactics and prevent all consumers from having their day in court.”
The report urges Congress to “support and encourage the swift implementation” of the CFPB’s arbitration rule and “strive to ensure that, a decade from now, consumers will still have an equally strong and successful watchdog in the Consumer Bureau to stop abusive and predatory practices as they do today.”
