House conferees just voted to send their offer on the Consumer Financial Protection Bureau to the Senate without substantive changes. Its provisions would:
– Enhance the FTC’s ability to do consumer protection. The FTC’s authority over false and misleading advertising should complement the CFPB’s efforts to protect consumers of financial products.
The House offer would change the overly burdensome (Magnuson Moss) rulemaking process the FTC currently operates under that can take up to 8 years for rules to be completed. Amendments would put the FTC on equal regulatory and enforcement footing with the new agency.
Energy & Commerce committee Chairman Henry Waxman (D-CA) made it short and simple: if you
support the consumer agency, you want the FTC to have these powers. A Rep. Bachus (R-AL) amendment to strip that authority was defeated.
– Make payday lenders, check cashers and private student loan providers subject to the CFPB’s rules.
– Strike a Senate amendment that allows payday and other lenders to influence rules before they’re proposed to the public.
– Strengthen the preemption provisions in the Senate bill so the OCC can’t override state consumer protection laws if there isn’t a federal standard to take its place.
Senate conferees looking for the strongest consumer protections possible should agree to each of these fixes. But the House offer has its own problems. At the top of the list: it would exempt auto dealers and attorneys from the CFPB’s authority. Loans – no matter who makes them, or who receives them – should operate under the same rules. Congress definitely shouldn’t be giving scam artists immunity just because they call themselves attorneys. (Download letter on the attorney exemption.) The Senate should reject these pieces of the House offer.
For a conference process that’s more open than any in recent memory, most of these decisions are still being made behind closed doors. But votes in the open on a lot of these issues will at least make members accountable, especially on consumer protection.
Conferees should be back in about 5 minutes to continue work. Coming up: swipe fees. Senate responses to the House CFPB offer come later in the day.