State AGs urge U.S. House leaders to oppose bill, which would repeal most of Dodd-Frank and “effectively eviscerate” the Consumer Financial Protection Bureau (CFPB)
DES MOINES – As the U.S. House today begins debating a bill to strip regulations designed to protect consumers and prevent another nationwide financial crisis, Attorney General Tom Miller and a group of state attorneys general are urging House leaders to oppose it.
The bill, called the Financial CHOICE Act, would repeal most of the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in 2010, following the nation’s financial meltdown.
“I sincerely hope that Congress does the right thing by rejecting a bill designed to yank an important cop off the beat—a cop whose only job is to protect consumers financially,” Miller said. “Dodd-Frank and the CFPB are vital to preventing the kind of reckless behavior, deception, abuse, and outright fraud that wrecked our economy during the financial crash.”
In a letter to House leaders, Miller joined a group of attorneys general from 19 states, plus the District of Columbia, in opposing the legislation.
Key portions of the bill, according to the state attorneys general, would “effectively eviscerate the role of the Consumer Financial Protection Bureau” and “effectively cripple the CFPB from doing the job it has been doing so effectively” since the agency began operating in 2011.
“The CFPB has taken enforcement actions to stem abuses by student loan originators and servicers, for-profit schools, debt collectors, credit reporting agencies, payday lenders and foreclosure rescue companies, among others,” the attorneys general wrote. “Since its inception, the CFPB has emerged as the independent federal consumer watchdog the nation has long needed, and as a key partner in critically important consumer protection work undertaken by our States and by State Attorneys General across the country.”
Among other concerns, Miller and the attorneys general expressed misgivings over several Financial CHOICE Act provisions that would have a “devastating” impact on the CFPB, including provisions that would:
- Eliminate the CFPB’s authority to prohibit unfair, deceptive, and abusive acts and practices
- Eliminate the agency’s supervision and enforcement authority over large banks and permit financial institutions that meet certain criteria to elect to be exempted from the CFPB’s supervisory authority
- Prohibit the CFPB from engaging in any rulemaking or enforcement with respect to payday and vehicle title loans. Payday lending, according to the bureau, has adversely affected the lives of millions of financially vulnerable consumers across the country
- Restrict states’ abilities to enforce interest rate caps
- Repeal CFPB’s authority to study and issue rules regarding arbitration in financial services contracts
- End the bureau’s current practice of publicly posting information concerning individual consumer complaints in a searchable database
“A rollback of these significant post-financial crisis rules and regulations would substantially harm consumers and the public in general,” the attorneys general wrote. “While the (Financial CHOICE) Act purports to protect consumers from over-regulation by federal agencies, its far-reaching consequences would make consumers more vulnerable to fraud and abuse in the marketplace.”