Consumer Financial Freedom and Washington Accountability Act (H.R. 3193)- CFPB Reform

By SBE Council at 18 February, 2014, 10:40 am

UPDATE: The Consumer Financial Freedom and Washington Accountability Act, H.R. 3193 passed the U.S. House 232-182

The Honorable Sean Duffy

U.S. House or Representatives

1208 Longworth Building

Washington, DC  20515

Dear Congressman Duffy:

The Small Business & Entrepreneurship Council (SBE Council) and its 100,000 members are pleased to support H.R. 3193, the Consumer Financial Freedom and Washington Accountability Act.

This important piece of legislation will bring much-needed reform, transparency, and accountability to the Consumer Protection Financial Bureau (CFPB), which is an unchecked government agency with the power to regulate practically all consumer financial products.  SBE Council is very concerned about potential regulatory actions by CFPB that will impact the cost and availability of capital for entrepreneurs, as well as regulatory intrusions that will deter innovation in the financial services industry.  As a government entity with extraordinary power, the CFPB should not be shielded from the traditional checks and balances that help shed light on a government agency’s workings, budget and processes.

According to a recent poll conducted by SBE Council’s Center for Regulatory Solutions, 72 percent of Americans believe federal regulations are created in a secretive rather than open process. Sixty eight percent believe federal regulations are crafted by “out-of-touch” people who are trying to advance a political agenda. Americans are concerned about the impact of overregulation on job creation, our economy and small businesses.  With respect to CFPB, any objective observer would conclude the bureau is operating in the darkness and lacks proper accountability to those it says it serves. This only fuels the skepticism Americans have about the regulatory process.

H.R 3193 contains important reforms that begin to hold CFPB accountable to the public.  These reforms include:  (1) eliminating the executive director position who has sole responsibility and replacing it with a commission, (2) paying its employees according to government pay scale, (3) preventing CFPB from accessing and using personal, nonpublic information about consumers without their consent, (4) subjecting CFPB budget to the Congressional authorization and appropriation process, and (5) requiring a financial implication estimate for any regulation promulgated by CFPB.

Thank you for your leadership on this critical issue. SBE Council looks forward to working with you to advance H.R. 3193.

Sincerely,

Karen Kerrigan, President & CEO