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Waters Statement in Opposition to Bill that Eases Rules for Megabanks and Predatory Lenders

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Washington, DC, March 6, 2018 | comments

Today, Congresswoman Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services, gave the following floor statement in opposition to H.R. 4607, a bill that directs regulators, including the Consumer Financial Protection Bureau, to dismantle rules considered inconvenient by the financial services industry despite the harm it may cause consumers or the economy.

As Prepared for Delivery

Mr. Speaker, I rise in opposition to H.R. 4607, the so-called “Comprehensive Regulatory Review Act.” Instead of advancing legislation that improves our financial regulatory framework, the Republican Majority is pushing yet another bill that is a giveaway to Wall Street and predatory lenders.

Let’s be clear—this bill is intended to dismantle rules considered inconvenient by the financial services industry. If this bill were enacted, financial services regulators would be forced to spend more time and resources on backward looking reviews and deregulating the financial services industry rather than strengthening protections for consumers and the economy.

Allow me to explain. The Economic Growth and Regulatory Paperwork Reduction Act, or EGRPRA, currently requires the Federal Reserve, the FDIC, and the OCC to conduct a review of the regulations that they’ve issued “in order to identify outdated or otherwise unnecessary regulatory requirements imposed on insured depository institutions.” The banking regulators conduct this review every 10 years.

Up until now, this review has been a relatively balanced, careful assessment that the banking regulators have done twice in the last two decades. And the regulators have taken this process seriously. The last review took about three years to complete. It involved field hearings and public engagement. The final report included many balanced and thoughtful recommendations to improve rules. Many of these would provide relief for community banks and credit unions but, in a way that also maintains safeguards for consumers, and protects the interests of the public and the broader economy. Unfortunately, H.R. 4607 would make three major mistakes in changing the current review process.

First, this bill actually requires regulators to change regulations so that they are less costly and burdensome for “covered persons.” Well, who are these “covered persons?”

Are they the millions of consumers who were harmed by Wells Fargo’s scheme to open fraudulent accounts without their knowledge? No.

Are they the many consumers who learned just a few days ago that Citigroup violated the law by charging them too much interest on their credit cards? No.

Are “covered persons” the Latino or African-American families who were discriminated against by JPMorgan Chase, Bank of America, and so many other banks, steering them into more costly mortgages when they qualified for more affordable loans? No.

Are they seniors or service members who fall prey to payday lenders that trap them in a cycle of debt? No.

Are they college graduates who are harassed by debt collectors for their student loan debt? No.

Under this bill, Mr. Speaker, covered persons are defined as, “any person that engages in offering or providing a consumer financial product or service; and any affiliate of [such] person… if such affiliate acts as a service provider to such person.”

That means Wells Fargo, JPMorgan Chase, Citigroup, Bank of America, payday lenders, mortgage brokers, debt collectors, and thousands of other financial companies. All of these companies would get easier rules that limit their costs and burdens without appropriately considering the impact on their customers. And this bill does nothing to strengthen protections for consumers where there might be deficiencies or gaps in our regulatory framework.

Second, unlike the other banking regulators, which are tasked with ensuring the safety and soundness of the financial services sector, the Consumer Bureau’s unique mission is the protection of consumers and of ensuring that the consumer marketplace operates in a fair, transparent, and competitive manner.

Although it may make sense for the banking agencies to periodically review their prudential rules, with a focus on their regulated entities, the Consumer Bureau should be making sure its rules are appropriately protecting consumers and the interests of the public, not financial corporations. In addition, the Consumer Bureau is already subject to unique accountability and oversight measures that the other financial regulators are not. These special checks-and-balances include the requirement that the Consumer Bureau have small business review panels as part of its rulemaking process and the ability of the Financial Stability Oversight Council (“FSOC”) to repeal any of its final rules. And the Consumer Bureau is already required to review all of its significant rules within five years of the time they go into effect, but in a balanced manner.

The third problem with H.R. 4607 is that it would make it harder for the regulators to do their jobs. The bill would require a comprehensive review of all banking and consumer protection regulations once every seven years instead of every decade. If regulators take these reviews as seriously as their previous reviews, as I believe they would, then that would mean they would be tied up, spending nearly half of each seven year cycle doing regulatory reviews instead of supervising their regulated entities and enforcing the law.

This bill would impose an unbalanced review process on regulators that favors industry’s wishes over consumers and the economy. The methodology in this bill promotes deregulation instead of creating a robust process to identify gaps or deficiencies in oversight that harm consumers, undermine the safety and soundness of our financial system, or jeopardize the country’s financial stability. I cannot support a bill that forces the Consumer Bureau to weaken rules for Wall Street and payday lenders.

I urge my colleagues to oppose H.R. 4607. I reserve the balance of my time.

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