Chairman Hensarling’s Statement on Bringing Accountability and Transparency to the CFPB
Nov 19, 2013 -
Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at today’s full committee markup of Consumer Financial Protection Bureau (CFPB) reform legislation:
Today our committee will take up six different bills dealing with the CFPB. These are modest, common-sense bills that bring a modicum of accountability and transparency to the CFPB. We know that this is an agency that was designed to be unique, if not perhaps rogue; it is an agency like no other. Arguably it is the single most powerful and least accountable Federal agency in the history of our nation.
Number one, the CFPB is effectively unaccountable to Congress since it is exempted from the Congressional budgetary and appropriations process unlike many other agencies. There is thus no check to ensure the CFPB director is spending the people’s money effectively to promote consumer protection, much less effectively in a time of runaway debt and deficits. Not even the agency from which the CFPB obtains its funding, the Fed, has oversight over the CFPB director’s spending.
The CFPB is unaccountable to the executive branch. The director, once appointed and confirmed, can only be removed by the president for cause. Neither can the nation’s chief executive enforce spending discipline on the Bureau because it is not subject to the Office of Management and Budget. Nor does CFPB have their own Inspector General.
Additionally, the CFPB is uniquely unaccountable to the courts. Section 1022 of Dodd-Frank provides that where the Bureau disagrees with any other agency about the meaning of a provision of Federal consumer financial law, a reviewing court must give deference to the Bureau’s views under the Chevron Doctrine.
Finally, in many respects, the CFPB is uniquely unaccountable even to itself since there is fundamentally no “it,” no “they” – only a he. There is no commission, only one omnipotent director, fundamentally accountable to no one.
Combined with this breathtaking lack of accountability is a grant of power under Dodd-Frank to the CFPB Director that is unilateral, unbridled and unparalleled. The director can unilaterally declare virtually any financial product or service as “unfair” or “abusive” at which point Americans will be denied that product or service even if they need it, want it, understand it and can afford it.
I think this sounds vaguely familiar to the American people, as our president recently told us “If you like your health insurance, you can keep it.” That was not true; the president did not level with the American people.
Practically every day I hear from another one of my constituents like the Smith family in Terrell, Texas who wrote: “Since Obama took office, the rates on this policy have more than doubled. Knowing what was to come, we were reluctant to find other health insurance, so we paid the premiums. Now we have a cancellation notice that terminates the coverage for our family.”
I hear from the Asher family in Dallas: “The Texas Risk Pool is closing. I received their letter on October 12. Normally I would manage risk by buying a catastrophic policy -- high deductible -- but these are illegal under the Affordable Care Act for my age group.”
I hear from others whose premiums are skyrocketing like the Patterson family in Garland, Texas: “We were informed yesterday that our insurance would go up by at least 33%! I am a single 51 year old man who just can’t afford this highway robbery. I am taking care of my 79 year old dad who has Alzheimer's. This Obamacare -- explicative deleted -- is robbing him just as Alzheimer's did.”
All of this in the name of consumer protection from an Administration who has justified their brazen and unfair practices by stating that, in their view, that if these plans were canceled because they were “substandard” or “not true insurance.” This warped view of consumer protection begs a number of questions about the CFPB:
If you like your credit card and its rewards program, can you keep it?
If you like your free checking account, can you keep it?
If you like your mortgage, can you keep it?
For tens of millions, the answer is probably no once the CFPB’s QM rule is fully implemented. Consumers are best served when we respect their personal choices, foster competition, innovative and transparent markets. And we protect them from coercion, fraud, and misleading advertising, whether that comes from a private business or the federal government itself. Only part of CFPB’s mission serves consumers, the rest harms consumers.
Soon the American people will ask who will protect consumers from the CFPB? The answer is the House Financial Services Committee.