H. Rept. 115-885 - COMMUNITY FINANCIAL INSTITUTION EXEMPTION ACT115th Congress (2017-2018)
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115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-885
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COMMUNITY FINANCIAL INSTITUTION EXEMPTION ACT
_______
August 3, 2018.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 1264]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 1264) to provide an exemption from rules and
regulations of the Bureau of Consumer Financial protection for
community financial institutions, and for other purposes,
having considered the same, report favorably thereon with
amendments and recommend that the bill as amended do pass.
The amendments are as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Community Financial Institution
Exemption Act''.
SEC. 2. EXEMPTION FOR CERTAIN FINANCIAL INSTITUTIONS.
Section 1022(b) of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5512(b)) is amended--
(1) in paragraph (3), by amending the heading to read as
follows: ``General exemptions'';
(2) by redesignating paragraph (4) as paragraph (5); and
(3) by inserting after paragraph (3) the following:
``(4) Specific exemption for certain financial
institutions.--
``(A) In general.--An insured depository institution
or credit union with less than $50,000,000,000 in
consolidated assets shall be exempt from all rules and
regulations issued by the Bureau.
``(B) Exception.--The Bureau may revoke an exemption
provided under subparagraph (A) with respect to a
specific rule or regulation and a specific class of
insured depository institutions or credit unions
described in subparagraph (A) if--
``(i) the Bureau makes a detailed, written
finding that such class of insured depository
institutions or credit unions described in
subparagraph (A) has engaged in a pattern or
practice of activities that have been
detrimental to the interests of consumers and
are of a type that the specific rule or
regulation is intended to address;
``(ii) the Bureau consults with the Federal
banking agencies with respect to such
revocation; and
``(iii) each Federal banking agency provides
the Bureau with a written notice stating that
the Federal banking agency agrees with such
revocation.
``(C) Effective date; effect on prior rules.--
``(i) Effective date.--This paragraph shall
take effect with respect to rules and
regulations issued or modified after the date
of enactment of this paragraph.
``(ii) Effect on prior rules.--This paragraph
shall not prohibit the Bureau from modifying a
rule or regulation issued prior to the date of
enactment of this paragraph with respect to
insured depository institutions or credit
unions described in subparagraph (A) if the
effect of such modification is to expand a
current exemption or to reduce the costs and
the regulatory burden associated with complying
with such rule or regulation.
``(D) Federal banking agency defined.--For purposes
of this paragraph, the term `Federal banking agency'
means the Board of Governors, the Office of the
Comptroller of the Currency, the Corporation, and the
National Credit Union Administration.''.
Amend the title so as to read:
A bill to provide an exemption from rules and regulations
of the Bureau of Consumer Financial Protection for certain
financial institutions, and for other purposes.
Purpose and Summary
Introduced by Representative Roger Williams on February 28,
2017, H.R. 1264, the ``Community Financial Institution
Exemption Act'', amends the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 [P.L. 111-203] to exempt
insured depository institutions or credit unions with less than
$50 billion in consolidated assets from all rules and
regulations issued by the Bureau of Consumer Financial
Protection (BCFP). Under specified circumstances, and with the
written agreement of the Board of Governors of the Federal
Reserve System (Federal Reserve) and other specified federal
banking agencies, the BCFP may revoke such an exemption with
respect to a certain rule, regulation, or class of
institutions.
Background and Need for Legislation
Title X of the Dodd-Frank Act established the BCFP with a
dual mandate to enforce federal consumer financial law and
ensure that consumers have access to financial products and
services, and warranting fair, transparent, and competitive
markets for such services and products. Under the Dodd-Frank
Act, the Bureau can issue rules, examine certain institutions,
and enforce consumer protection laws and regulations. Under the
same authority, the BCFP can also exempt, conditionally or
unconditionally, covered persons from its rules and
regulations.
Although Dodd-Frank's reforms are purportedly directed
primarily at large, complex U.S. financial institutions, the
Act's breadth, coupled with the regulatory response from 2010
through 2016, captured smaller community financial institutions
as well. These smaller institutions regularly express concerns
to the Bureau and to Congress about the growing weight and
complexity of regulation, and never-ending compliance costs,
which affects their ability to provide the products and
services necessary to allow small businesses to grow and
consumers to access credit to realize their financial and
personal goals.
The regulatory burden falls into three major categories:
(1) additional operational, legal and auditing costs associated
with compliance; (2) restrictions on fees, interest rates, or
other revenue; and (3) unintentional barriers to offer a
product or service because of regulatory complexity.
Dodd-Frank's complex and expansive regulatory regime has
had a ``trickle-down effect, where regulation originally meant
for big institutions is being applied to smaller banks,'' often
in the form of bank examiners identifying those regulations as
``best practices'' that should be followed by institutions
regardless of their size. Smaller institutions are
disproportionately affected by increased regulation because
they are less able to absorb additional costs.
The explosive growth of bank regulation following the
enactment of Dodd-Frank has made it significantly harder for
smaller banks and credit unions to serve their customers.
Community financial institutions find that their compliance
costs have gone up as they attempt to keep up with new
regulations and more intrusive examinations. New regulations
and higher compliance costs have forced small banks and credit
unions to cut back on the services they offer to their
customers. As a result, many consumers have found that their
local banks can no longer provide them with the products and
services that they need and want.
Regulators have acknowledged the validity of these
concerns. For example, in an October 4, 2017, speech, Federal
Reserve Chairwoman Janet Yellen stated:
The Fed has been working hard to ensure that its regulation
and supervision of banks are tailored appropriately to the
size, complexity and role different institutions play in the
financial system . . . [f]or community banks, which by and
large avoided the risky business practices that contributed to
the financial crisis, we have been focused on making sure that
much-needed improvements to regulation and supervision since
the crisis are appropriate and not unduly burdensome[.]\1\
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\1\https://www.federalreserve.gov/newsevents/speech/
yellen20171004a.htm.
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These findings are buttressed by a 2014 working paper by
the Mercatus Center at George Mason University which surveyed
``approximately 200 banks across 41 states with less than $10
billion in assets each, serving mostly rural and small
metropolitan markets.''\2\ The authors found that ``Dodd-Frank
has proved burdensome to small banks, and customers are seeing
the effects of the increased regulatory burden through reduced
product and service offerings as small banks rethink their
lines of business and consider consolidation activity.'' As a
result, ``[t]hese customers . . . may shift their patronage to
larger banks that enjoy competitive advantages in managing
regulatory costs but are not as conveniently located, do not
provide the same level of customer service, or do not offer a
regionally tailored product mix. Large banks may also not be as
willing to serve the customers, such as small businesses and
rural populations, which small banks typically serve.''
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\2\https://www.mercatus.org/publication/how-are-small-banks-faring-
under-dodd-frank.
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The Mercatus study also explained how the Dodd-Frank Act's
``one-size-fits-all'' regulatory approach harms small banks and
their customers:
``Regulations--such as many of those emerging from
Dodd-Frank--that encourage or insist on standardization
of bank products and services can be particularly
harmful to small banks and their customers. Large banks
find it profitable to offer standardized products.
Small banks tend to serve idiosyncratic markets, and
they succeed by molding their business models to the
economic contours of their local communities. A large
bank cannot accommodate certain types of customers with
its standard products and processes. If federal banking
regulations require small banks to mimic these products
and processes, these customers might find that small
banks cannot serve them either.''\3\
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\3\Id.
The result of a less competitive marketplace, where smaller
institutions are overwhelmed by the volume and complexity of
regulations and are forced to exit business lines or seek to
merge with other institutions, is fewer and more expensive
borrowing choices for consumers and small businesses--
particularly for those economically disadvantaged groups that
have historically had the most difficulty to access credit.
By exempting institutions with less than $50 billion in
total consolidated assets from the Bureau's current and future
rules and regulations, H.R. 1264 appropriately refines Dodd-
Frank's breadth and interpretation by aggressive regulators and
replaces it with a regulatory regime that recognizes that
small, non-threatening, community-based financial institutions
did not cause the financial crisis, and are fundamentally
incapable of inflicting harm relative to the onerous
regulations exacted upon them. The exemption provided by H.R.
1264 does not exempt these institutions from all prudential
regulation. The Federal Reserve, the Office of the Comptroller
of the Currency, the Federal Deposit Insurance Corporation or
the National Credit Union Administration would continue to
issue regulations, examine, and enforce the consumer finance
laws for institutions that H.R. 1264 would exempt from the
Bureau's direct oversight. There are approximately 38 banks
with total consolidated assets of $50 billion or greater.
Approximately four of those 38 are traditional banks, meaning
that they do not engage in a wider range of nonbank financial
activities that could present risk. Therefore, approximately
5,700 banks with less than $50 billion in assets, and the
consumers they serve, would directly benefit from this
exemption.
Hearings
The Committee on Financial Services held a hearing
examining matters relating to H.R. 1264 on January 9, 2018.
Committee Consideration
The Committee on Financial Services met in open session on
January 18, 2018, and ordered H.R. 1264 to be reported
favorably to the as amended by a recorded vote of 30 yeas to 25
nays (recorded vote no. FC-137), a quorum being present. Before
the motion to report was offered, the Committee adopted an
amendment in the nature of a substitute offered by Mr. Williams
by voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
sole recorded vote was on a motion by Chairman Hensarling to
report the bill favorably to the as amended. The motion was
agreed to by a recorded vote of 30 yeas to 25 nays (Record vote
no. FC-137), a quorum being present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 1264
will allow for small financial institutions with consolidated
assets under $50 billion to more adequately provide reasonably
priced financial services and products to the general public
without having to abide by BCFP regulations and rules that were
intended for significantly bigger institutions.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Congressional Budget Office Estimates
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 11, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1264, the
Community Financial Institution Exemption Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Stephen
Rabent.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 1264--Community Financial Institution Exemption Act
The Consumer Financial Protection Bureau (CFPB) enforces
federal consumer financial protection laws but may exempt
classes of institutions, service providers, or consumer
financial products or services from its rules.
H.R. 1264 would require the CFPB to exempt insured
depository institutions and credit unions with less than $50
billion in assets from all rules and regulations the agency
issues or modifies after the date of the bill's enactment. The
bill would authorize CFPB to revoke the exemption from a
specific rule for a specific class of institutions under
certain circumstances. The agency also could modify existing
rules and regulations for insured depository institutions and
credit unions with less than $50 billion in assets if the
modification would expand a current exemption or reduce the
cost and regulatory burden of compliance.
Using information from the CFPB, CBO estimates that
enacting H.R. 1264 would require the equivalent of one
additional employee to expand the CBPB's current analyses of
the effects of new or modified rules and regulations. Assuming
the CFPB hired an additional employee to do that work the bill
would increase direct spending by $2 million over the 2019-2028
period. Because enacting H.R. 1264 could affect direct
spending, pay-as-you-go procedures apply. Enacting the bill
would not affect revenues.
CBO estimates that enacting H.R. 1264 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2029.
H.R. 1264 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Stephen Rabent.
The estimate was reviewed by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
Federal Mandates Statement
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995.
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, (115th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section cites H.R. 1264 as the ``Community Financial
Institutions Exemption Act''.
Section 2. Exemption for certain financial institutions
This section amends Section 1022(b) of the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 (12 U.S.C.
5512(b)) by providing for insured depository institution or
credit union with less than $50 billion in consolidated assets
to be exempt from all rules and regulations issued by the
Bureau. The Bureau may revoke an exemption for an institution
with less than $50 billion in assets or a specific rule if the
Bureau finds an institution has engaged in a pattern of
activity that is detrimental to the interest of consumers.
Exemption revocation requires the appropriate federal banking
agency to agree with the Bureau's findings.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
CONSUMER FINANCIAL PROTECTION ACT OF 2010
* * * * * * *
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION
* * * * * * *
Subtitle B--General Powers of the Bureau
* * * * * * *
SEC. 1022. RULEMAKING AUTHORITY.
(a) In General.--The Bureau is authorized to exercise its
authorities under Federal consumer financial law to administer,
enforce, and otherwise implement the provisions of Federal
consumer financial law.
(b) Rulemaking, Orders, and Guidance.--
(1) General authority.--The Director may prescribe
rules and issue orders and guidance, as may be
necessary or appropriate to enable the Bureau to
administer and carry out the purposes and objectives of
the Federal consumer financial laws, and to prevent
evasions thereof.
(2) Standards for rulemaking.--In prescribing a rule
under the Federal consumer financial laws--
(A) the Bureau shall consider--
(i) the potential benefits and costs
to consumers and covered persons,
including the potential reduction of
access by consumers to consumer
financial products or services
resulting from such rule; and
(ii) the impact of proposed rules on
covered persons, as described in
section 1026, and the impact on
consumers in rural areas;
(B) the Bureau shall consult with the
appropriate prudential regulators or other
Federal agencies prior to proposing a rule and
during the comment process regarding
consistency with prudential, market, or
systemic objectives administered by such
agencies; and
(C) if, during the consultation process
described in subparagraph (B), a prudential
regulator provides the Bureau with a written
objection to the proposed rule of the Bureau or
a portion thereof, the Bureau shall include in
the adopting release a description of the
objection and the basis for the Bureau
decision, if any, regarding such objection,
except that nothing in this clause shall be
construed as altering or limiting the
procedures under section 1023 that may apply to
any rule prescribed by the Bureau.
(3) [Exemptions.--] General exemptions._
(A) In general.--The Bureau, by rule, may
conditionally or unconditionally exempt any
class of covered persons, service providers, or
consumer financial products or services, from
any provision of this title, or from any rule
issued under this title, as the Bureau
determines necessary or appropriate to carry
out the purposes and objectives of this title,
taking into consideration the factors in
subparagraph (B).
(B) Factors.--In issuing an exemption, as
permitted under subparagraph (A), the Bureau
shall, as appropriate, take into
consideration--
(i) the total assets of the class of
covered persons;
(ii) the volume of transactions
involving consumer financial products
or services in which the class of
covered persons engages; and
(iii) existing provisions of law
which are applicable to the consumer
financial product or service and the
extent to which such provisions provide
consumers with adequate protections.
(4) Specific exemption for certain financial
institutions.--
(A) In general.--An insured depository
institution or credit union with less than
$50,000,000,000 in consolidated assets shall be
exempt from all rules and regulations issued by
the Bureau.
(B) Exception.--The Bureau may revoke an
exemption provided under subparagraph (A) with
respect to a specific rule or regulation and a
specific class of insured depository
institutions or credit unions described in
subparagraph (A) if--
(i) the Bureau makes a detailed,
written finding that such class of
insured depository institutions or
credit unions described in subparagraph
(A) has engaged in a pattern or
practice of activities that have been
detrimental to the interests of
consumers and are of a type that the
specific rule or regulation is intended
to address;
(ii) the Bureau consults with the
Federal banking agencies with respect
to such revocation; and
(iii) each Federal banking agency
provides the Bureau with a written
notice stating that the Federal banking
agency agrees with such revocation.
(C) Effective date; effect on prior rules.--
(i) Effective date.--This paragraph
shall take effect with respect to rules
and regulations issued or modified
after the date of enactment of this
paragraph.
(ii) Effect on prior rules.--This
paragraph shall not prohibit the Bureau
from modifying a rule or regulation
issued prior to the date of enactment
of this paragraph with respect to
insured depository institutions or
credit unions described in subparagraph
(A) if the effect of such modification
is to expand a current exemption or to
reduce the costs and the regulatory
burden associated with complying with
such rule or regulation.
(D) Federal banking agency defined.--For
purposes of this paragraph, the term ``Federal
banking agency'' means the Board of Governors,
the Office of the Comptroller of the Currency,
the Corporation, and the National Credit Union
Administration.
[(4)] (5) Exclusive rulemaking authority.--
(A) In general.--Notwithstanding any other
provisions of Federal law and except as
provided in section 1061(b)(5), to the extent
that a provision of Federal consumer financial
law authorizes the Bureau and another Federal
agency to issue regulations under that
provision of law for purposes of assuring
compliance with Federal consumer financial law
and any regulations thereunder, the Bureau
shall have the exclusive authority to prescribe
rules subject to those provisions of law.
(B) Deference.--Notwithstanding any power
granted to any Federal agency or to the Council
under this title, and subject to section
1061(b)(5)(E), the deference that a court
affords to the Bureau with respect to a
determination by the Bureau regarding the
meaning or interpretation of any provision of a
Federal consumer financial law shall be applied
as if the Bureau were the only agency
authorized to apply, enforce, interpret, or
administer the provisions of such Federal
consumer financial law.
(c) Monitoring.--
(1) In general.--In order to support its rulemaking
and other functions, the Bureau shall monitor for risks
to consumers in the offering or provision of consumer
financial products or services, including developments
in markets for such products or services.
(2) Considerations.--In allocating its resources to
perform the monitoring required by this section, the
Bureau may consider, among other factors--
(A) likely risks and costs to consumers
associated with buying or using a type of
consumer financial product or service;
(B) understanding by consumers of the risks
of a type of consumer financial product or
service;
(C) the legal protections applicable to the
offering or provision of a consumer financial
product or service, including the extent to
which the law is likely to adequately protect
consumers;
(D) rates of growth in the offering or
provision of a consumer financial product or
service;
(E) the extent, if any, to which the risks of
a consumer financial product or service may
disproportionately affect traditionally
underserved consumers; or
(F) the types, number, and other pertinent
characteristics of covered persons that offer
or provide the consumer financial product or
service.
(3) Significant findings.--
(A) In general.--The Bureau shall publish not
fewer than 1 report of significant findings of
its monitoring required by this subsection in
each calendar year, beginning with the first
calendar year that begins at least 1 year after
the designated transfer date.
(B) Confidential information.--The Bureau may
make public such information obtained by the
Bureau under this section as is in the public
interest, through aggregated reports or other
appropriate formats designed to protect
confidential information in accordance with
paragraphs (4), (6), (8), and (9).
(4) Collection of information.--
(A) In general.--In conducting any monitoring
or assessment required by this section, the
Bureau shall have the authority to gather
information from time to time regarding the
organization, business conduct, markets, and
activities of covered persons and service
providers.
(B) Methodology.--In order to gather
information described in subparagraph (A), the
Bureau may--
(i) gather and compile information
from a variety of sources, including
examination reports concerning covered
persons or service providers, consumer
complaints, voluntary surveys and
voluntary interviews of consumers,
surveys and interviews with covered
persons and service providers, and
review of available databases; and
(ii) require covered persons and
service providers participating in
consumer financial services markets to
file with the Bureau, under oath or
otherwise, in such form and within such
reasonable period of time as the Bureau
may prescribe by rule or order, annual
or special reports, or answers in
writing to specific questions,
furnishing information described in
paragraph (4), as necessary for the
Bureau to fulfill the monitoring,
assessment, and reporting
responsibilities imposed by Congress.
(C) Limitation.--The Bureau may not use its
authorities under this paragraph to obtain
records from covered persons and service
providers participating in consumer financial
services markets for purposes of gathering or
analyzing the personally identifiable financial
information of consumers.
(5) Limited information gathering.--In order to
assess whether a nondepository is a covered person, as
defined in section 1002, the Bureau may require such
nondepository to file with the Bureau, under oath or
otherwise, in such form and within such reasonable
period of time as the Bureau may prescribe by rule or
order, annual or special reports, or answers in writing
to specific questions.
(6) Confidentiality rules.--
(A) Rulemaking.--The Bureau shall prescribe
rules regarding the confidential treatment of
information obtained from persons in connection
with the exercise of its authorities under
Federal consumer financial law.
(B) Access by the bureau to reports of other
regulators.--
(i) Examination and financial
condition reports.--Upon providing
reasonable assurances of
confidentiality, the Bureau shall have
access to any report of examination or
financial condition made by a
prudential regulator or other Federal
agency having jurisdiction over a
covered person or service provider, and
to all revisions made to any such
report.
(ii) Provision of other reports to
the bureau.--In addition to the reports
described in clause (i), a prudential
regulator or other Federal agency
having jurisdiction over a covered
person or service provider may, in its
discretion, furnish to the Bureau any
other report or other confidential
supervisory information concerning any
insured depository institution, credit
union, or other entity examined by such
agency under authority of any provision
of Federal law.
(C) Access by other regulators to reports of
the bureau.--
(i) Examination reports.--Upon
providing reasonable assurances of
confidentiality, a prudential
regulator, a State regulator, or any
other Federal agency having
jurisdiction over a covered person or
service provider shall have access to
any report of examination made by the
Bureau with respect to such person, and
to all revisions made to any such
report.
(ii) Provision of other reports to
other regulators.--In addition to the
reports described in clause (i), the
Bureau may, in its discretion, furnish
to a prudential regulator or other
agency having jurisdiction over a
covered person or service provider any
other report or other confidential
supervisory information concerning such
person examined by the Bureau under the
authority of any other provision of
Federal law.
(7) Registration.--
(A) In general.--The Bureau may prescribe
rules regarding registration requirements
applicable to a covered person, other than an
insured depository institution, insured credit
union, or related person.
(B) Registration information.--Subject to
rules prescribed by the Bureau, the Bureau may
publicly disclose registration information to
facilitate the ability of consumers to identify
covered persons that are registered with the
Bureau.
(C) Consultation with state agencies.--In
developing and implementing registration
requirements under this paragraph, the Bureau
shall consult with State agencies regarding
requirements or systems (including coordinated
or combined systems for registration), where
appropriate.
(8) Privacy considerations.--In collecting
information from any person, publicly releasing
information held by the Bureau, or requiring covered
persons to publicly report information, the Bureau
shall take steps to ensure that proprietary, personal,
or confidential consumer information that is protected
from public disclosure under section 552(b) or 552a of
title 5, United States Code, or any other provision of
law, is not made public under this title.
(9) Consumer privacy.--
(A) In general.--The Bureau may not obtain
from a covered person or service provider any
personally identifiable financial information
about a consumer from the financial records of
the covered person or service provider,
except--
(i) if the financial records are
reasonably described in a request by
the Bureau and the consumer provides
written permission for the disclosure
of such information by the covered
person or service provider to the
Bureau; or
(ii) as may be specifically permitted
or required under other applicable
provisions of law and in accordance
with the Right to Financial Privacy Act
of 1978 (12 U.S.C. 3401 et seq.).
(B) Treatment of covered person or service
provider.--With respect to the application of
any provision of the Right to Financial Privacy
Act of 1978, to a disclosure by a covered
person or service provider subject to this
subsection, the covered person or service
provider shall be treated as if it were a
``financial institution'', as defined in
section 1101 of that Act (12 U.S.C. 3401).
(d) Assessment of Significant Rules.--
(1) In general.--The Bureau shall conduct an
assessment of each significant rule or order adopted by
the Bureau under Federal consumer financial law. The
assessment shall address, among other relevant factors,
the effectiveness of the rule or order in meeting the
purposes and objectives of this title and the specific
goals stated by the Bureau. The assessment shall
reflect available evidence and any data that the Bureau
reasonably may collect.
(2) Reports.--The Bureau shall publish a report of
its assessment under this subsection not later than 5
years after the effective date of the subject rule or
order.
(3) Public comment required.--Before publishing a
report of its assessment, the Bureau shall invite
public comment on recommendations for modifying,
expanding, or eliminating the newly adopted significant
rule or order.
* * * * * * *
MINORITY VIEWS
H.R. 1264 would exempt depository institutions with less
than $50 billion in assets, or over 99 percent of all banks and
credit unions, from any new or modified consumer protection
regulation issued by the Consumer Financial Protection Bureau
(``Consumer Bureau''). Only under extremely limited
circumstances, and with the written approval of all other
federal prudential banking regulators--the Board of Governors
of the Federal Reserve System (``Federal Reserve Board''), the
Federal Deposit Insurance Corporation (``FDIC''), the Office of
the Comptroller of the Currency (``OCC''), and the National
Credit Union Administration (``NCUA'')--would the Consumer
Bureau be able to revoke the exemption for a class of
institutions with respect to a specific consumer protection
regulation.
Section 1022 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (``Dodd-Frank Act'') established the
Consumer Bureau, and granted it rulemaking authority for over
20 major federal consumer financial protection laws, including
the Equal Credit Opportunity Act, the Truth In Lending Act, and
the Fair Credit Reporting Act. The same section of the Dodd-
Frank Act also provides the Consumer Bureau with discretion to
tailor its rulemaking for smaller, rural, and community
financial institutions.\1\ The Consumer Bureau has repeatedly
exercised this authority to provide targeted regulatory relief
when it is warranted. For example, the Consumer Bureau tailored
its Ability-to-Repay and Qualified Mortgage Standards to
provide carve-outs for small creditors in rural and underserved
areas.
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\1\12 U.S.C. Sec. 5512 (2010) ``The [Consumer Bureau] may
conditionally or unconditionally exempt any class of covered persons,
service providers, or consumer financial products or services, from any
provision of this title, or from any rule issued under this title, as
the Bureau determines necessary or appropriate to carry out the
purposes and objectives of this title.''
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However, H.R. 1264 would override the Dodd-Frank Act and
take the unprecedented step of exempting all banks and credit
unions with less than $50 billion in total assets from any
updated or new federal consumer financial protection
regulations. Nearly all of the nation's banks, and all but one
credit union, would fall under the bill's exemption. The bill
would provide a narrow exception to allow the Consumer Bureau
to apply, or re-apply, a federal consumer financial protection
regulation to some or all of these institutions, but only if
the institution ``has engaged in a pattern or practice of
activities that have been detrimental to the interests of
consumers and are of a type that the specific rule or
regulation is intended to address,'' and the application is
approved by the Federal Reserve Board, FDIC, OCC and NCUA. If a
single regulator vetoed the action, the depository institutions
would continue to be exempt from the rule.
Furthermore, the bill only adds to the extensive
constraints that the Consumer Bureau's rulemaking authority is
already subject to. Specifically, the Dodd-Frank Act
establishes procedures that the Consumer Bureau must follow
when proposing and prescribing rules, in addition to the notice
of proposed rulemaking and comment period procedures required
for informal rulemakings under the Administrative Procedure Act
and other generally applicable federal administrative laws. For
example, before proposing a rule as well as during the comment
period of a proposed rule, the Consumer Bureau must consult
with other appropriate financial regulators, and address any
written objections by federal prudential banking regulators.
At a time when banks are experiencing record growth and
profitability and the Executive Branch has taken illegal
actions to subvert the Consumer Bureau, this measure would
further weaken oversight for consumer protection laws and
regulations for almost all of our nation's banks. The Consumer
Bureau is the only federal agency solely responsible for
consumer protection in the financial sector, and this
legislative proposal would severely hamper its ability to carry
out its mission. H.R. 1264 impedes the Consumer Bureau's
authority to protect consumers and regulate the banking
industry. In no way can this be described as a targeted and
reasonable approach.
For these reasons, we oppose H.R. 1264.
Maxine Waters.
Nydia M. Velazquez.
Carolyn B. Maloney.
Joyce Beatty.
Keith Ellison.
[all]