|Copyright:||(c) 2011 Congressional Quarterly Inc.|
|Source:||Congressional Quarterly Inc.|
xfdte CONSUMER-FINANCIAL sked
HOUSE FINANCIAL SERVICES COMMITTEE
HOUSE FINANCIAL SERVICES
FINANCIAL INSTITUTIONS AND CONSUMER CREDIT
CONSUMER FINANCIAL PROTECTION BUREAU OVERSIGHT
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copyright or other notice from copies of the content.Opening Statement of
“The Consumer Financial Protection Bureau was the crown jewel of the 2,300-page Dodd-Frank Act that
“The Dodd-Frank Act provides that all `covered persons` and `service providers` are under the jurisdiction of the Bureau. A `covered person` is any person that engages in offering or providing a `financial product or service.` A `service provider` is any person who provides a material service to a “covered person.“ Given these broad definitions, the CFPB`s authority depends upon the meaning of `financial product or service,` but that term will be defined by the Director of the Bureau. In other words, a `financial product or service` is anything the Director wants it to be, except for certain limited exclusions such as insurance and lending by auto dealers.
The Dodd-Frank Act also confers virtually unfettered discretion on the Director of the Bureau to identify financial products and services that the Director finds to be `unfair, deceptive, or abusive` and ban them under a highly subjective standard that has no legally defined content. “This broad and undefined authority makes the CFPB perhaps the single most powerful agency ever created by an act of
“The Dodd-Frank Act allows for the CFPB to draw funds from the Federal Reserve as the Director of the Bureau determines to be `necessary.` There is a funding cap in place of 10% of the Fed`s operating expenses. In addition, if
“The President hasn`t even nominated a Director to head this agency more than six months after he signed the law creating the new Bureau. It is entirely sensible to limit the Bureau`s funding until we know more about the Bureau and its needs.
<p>“Throughout the months of debate on the CFPB, House Republicans warned that a massive budget with no strings attached represented an unprecedented delegation of responsibility to a single unelected bureaucrat.
The situation has been made worse as we are now more than six- months into Dodd-Frank`s implementation and we don`t even have a nomination for the CFPB Director. When asked about the timing of a nomination at a hearing last September, Secretary Geithner simply responded `soon.` That was almost five months ago.
“I look forward to hearing Professor Warren`s testimony today about these concerns in particular.“