The American people delivered a message to Washington in November: stop the federal overreach, change course and get the government off of our backs. For the millions of American consumers, small business owners and employees who rely on our financial system each and every day, the over-regulation from Washington has meant increased fees, fewer services and diminished access to credit. It’s had a chilling effect on our economy and held back growth, wages and opportunity. And the root cause is Dodd-Frank and the Consumer Financial Protection Bureau that it created.
The CFPB is an agency of the executive branch that has been burying consumers and our economy under an avalanche of regulations. Many of these misdirected guidelines are drawn up by disconnected bureaucrats under the influence of flawed statistics and without a clear understanding of their impact on the consumers they aim to protect. It is important to protect consumers from any discriminatory practice. Yet, in doing so, we must be cautious that the cure is not worse than the disease. Yes, there are bad actors out there and we should hold them accountable to the consumer protection laws enacted by Congress. However, the CFPB, as currently structured, goes far beyond this task.
As a former bank examiner, small town banker, member of the House Financial Services Committee and Chairman of its Subcommittee on Financial Institutions and Consumer Credit, I can tell you that the CFPB in its current form is without question harming consumers. When you consider its structure, it’s not hard to see why.
The CFPB is an agency unlike any other in American history. It has a single, unaccountable director. It draws unlimited funds from the Federal Reserve, outside of the purview of Congress. And the CFPB makes law through its own enforcement of the rules that it promulgates. A federal court even found its structure to be unconstitutional, and it is the subject of ongoing litigation.
It’s no surprise that the very real fear that the CFPB might deem something unacceptable stops innovation and the development of new products, and it makes it tougher for consumers to get access to affordable credit and services in a timely fashion. All the while, it has not addressed the underlying causes of the 2008 financial crisis.
There are countless stories of the CFPB’s overreach and abuse available. One example is its rule that would essentially end access to short-term loans. I have heard from many Missourians that have needed access to small dollar, short-term loans to cover unforeseen expenses. A bank will not make you a loan of a few hundred dollars to fix your car in order to make it to work or to pay for an unexpected medical emergency or to cover a utility bill before your paycheck arrives. This rule will most certainly not solve any of the underlying causes of the 2008 financial crisis, but what it does do is punishes consumers and forces them towards riskier, unregulated products.
We’ve diagnosed the cause and the symptoms. Now it’s time to talk about the solution: reform of the CFPB into an advisory and advocacy position that is really focused on protecting consumers. I am proud of Chairman Jeb Hensarling’s strong leadership on this issue and the important legislation that he is crafting in response to it. We are going to take the time to get it right. The Chairman is vetting and balancing a lot of different ideas from Americans across the country on this subject. Helping consumers achieve financial independence shouldn’t be a partisan issue. In that spirit, I ask my Democratic colleagues to join me in supporting our efforts to restructure and reform the CFPB into an accountable, constitutional, civil enforcement agency.
Doing so will provide the American people some much-deserved relief and will let them know that we heard their message loud and clear.
