Today, the House Financial Services Committee is considering several bills designed to undercut critical Wall Street reform and consumer protection efforts.
These bills include efforts at the behest of Wall Street to undermine the people’s watchdog — the Consumer Financial Protection Bureau (CFPB); an attack on American families’ retirement security by blocking the proposed Conflict of Interest Rule; and a step backward on transparency and accountability for public firms’ CEO compensation.
At a time when the most sweeping Wall Street reforms since the Great Depression are delivering for the American people and the major elements of reform are in place, we should continue to move forward, rather than taking steps back.
Instead, today’s markup is yet another reminder that Republicans in Congress retain their singular focus on undercutting consumer protections and other important reforms.
Here’s the deal on three of the bad ideas being considered.
Wall Street Reform created, for the first time, a watchdog — the CFPB — whose sole job is protecting consumers from deceptive and unfair practices by mortgage lenders, payday lenders, debt collectors, and others.
This new consumer watchdog, the CFPB, has been hard at work protecting families by making it tougher to be tricked into mortgages they can’t afford, setting clearer rules that help responsible lenders understand their obligations, and cracking down on credit card companies that charge hidden fees. CFPB enforcement actions have already resulted in more than $10 billion in relief to 17 million consumers who have been harmed by illegal practices.
Today, the Committee is considering a provision to install a commission structure at the CFPB, instead of a Director. Opponents of the CFPB view a commission structure as a maneuver designed to tie the CFPB in knots, limiting the Bureau’s effectiveness. Congress designed the CFPB to respond rapidly to changing market conditions and to react quickly to new threats to consumers and determined the CFPB would operate most effectively with a single leader.
It’s also worth noting that the same Republicans who want to move the CFPB to a commission structure under the false premise of accountability, are the same people who want to put the Conflict of Interest Rule on ice and roll back other critical reforms.
In short, the CFPB has been an incredibly effective watchdog for the American people. If it ain’t broke, don’t fix it.
The second bill would essentially block the Department of Labor’s proposed Conflict of Interest Rule from moving forward. At the bidding of the special interests, the bill thwarts a rule that simply requires financial advisers to adhere to a commonsense principle — that they should always, always put their clients’ best interest first. Everyone should be able to get behind that.
Taking into account nearly 150 days of extensive public comment, the Department is now working to craft a final rule. Now’s the time to work to get this done.
The President and the entire Administration are deeply committed to protecting Americans’ retirement security and will strongly oppose any attempts in Congress to block the proposed rule from moving forward. We can’t continue a status quo in which conflicts of interest cause hardworking American families to lose $17 billion of their retirement savings per year.
We were pleased to see the Securities Exchange Commission (SEC) take another step forward implementing Wall Street Reform when they recently finalized the rules requiring firms to report the ratio of their CEO compensation relative to their typical employee.
Importantly, under the final rule issued by the SEC in August, companies are granted substantial flexibility in determining the methods they use to identify median employee compensation. The assertions from industry about the burden of this rule are drastically overstated, and the rule will provide additional transparency for everyday investors.
Unfortunately, yet another GOP-led bill being considered today would undo this increased transparency and accountability.
In addition to trying to gut consumer protections piece by piece, Republicans are also going after implementation and enforcement of the law with a sledgehammer, by underfunding the independent regulators charged with implementing the reforms.
House and Senate Republicans have championed bills that would slash funding for SEC by 13 percent below the levels in the President's Budget, a cut of hundreds of millions of dollars. And they have proposed to cut the Commodity Futures Trading Commission (CFTC) by at least 22 percent.
These cuts are penny wise and pound foolish, and they're part of a larger, disturbing trend by Republicans in Congress to take us back to the recklessness and irresponsibility that led to the worst financial crisis since the Great Depression.
So, you have our word: we're going to continue to fight to move forward, and the President's been clear he will fight hard against efforts by Republicans to undermine these critical reforms.