“Dodd-Frank gave regulators 270 days to prescribe regulations on risk retention, and three and a half years later those regulators are still struggling to get their act together while the housing market limps along and private capital sits on the sidelines. This rule is one more reason why Washington bureaucrats shouldn’t be picking winners and losers in the housing finance market. If risk retention is a good idea, it should be something that the market establishes, not that the government mandates.
“More convoluted top-down regulations from Washington aren’t going to build the sustainable housing finance system that helps Americans buy homes they can actually afford to keep. The better solution is to repeal the Dodd-Frank Act’s risk retention provision, end the federal government’s domination of the housing finance market, and put private capital at the center of the mortgage system. That’s exactly what the PATH Act does,” said Chairman Jeb Hensarling.
The PATH Act (Protecting American Taxpayers and Homeowners) was approved by the House Financial Services Committee last year. Included in the PATH Act are provisions that:
Hensarling on the Export-Import Bank
Mr. Hensarling views the Ex-Im battle “somewhat as a precursor to the tax reform fight because there are so many vested corporate interests” served by the current tax code: “If we can’t get rid of this agency and the corporate welfare it represents, how will House Republicans ever muster the intestinal fortitude to be able to do fundamental tax reform?” He adds, with some political poignancy, “I don’t know how we will ever have the moral authority to deal with social welfare if we can’t deal with corporate welfare.”
Hensarling on Dodd-Frank
Mr. Hensarling sees an opportunity to revisit the 2010 Dodd-Frank law, which was drafted in haste after the financial crisis and was falsely promoted as an end to too-big-to-fail banks. Mr. Hensarling says that “given the state of the economy, people are taking a second look” at both the law and the story they were sold by its authors. “We’ve all heard about Wall Street greed. I think people are now starting to be a little bit more sensitized to Washington greed—the greed for power and control over our lives and our economy.”
He notes that consumers aren’t pleased with the results: Free checking and credit-card perks are disappearing, and more generally the economy is lagging. Mr. Obama’s approval ratings on economic policy are down, and Mr. Hensarling thinks one reason is the burden on lending and small community banks by Dodd-Frank’s “sheer weight, volume, complexity and number of regulations.”
Hensarling on the CFPB
He is particularly focused on the law’s Financial Stability Oversight Council… and on the Consumer Financial Protection Bureau (CFPB), which he calls “the single most unaccountable agency in the history of America.” Housed within the Federal Reserve, it draws funding from the Fed but doesn’t answer to any Fed officials, or to congressional appropriators, or to a bipartisan commission, as most independent agencies do. The bureau is run by a single director who cannot be removed unless the president can show cause. Mr. Hensarling also notes that the Bureau doesn’t even have true oversight by the courts because of the Supreme Court’s Chevron legal doctrine that compels judges to show deference to the bureau’s decisions. This lack of accountability may be why the bureau has been constructing what Mr. Hensarling calls “the Taj Mahal” to serve as its Beltway headquarters.
Mr. Hensarling believes the CFPB’s lack of accountability is also leading to “consumer protections” that Americans don’t want or need. Once the bureau’s rules are fully implemented, he says, “one third of all blacks and Hispanics” will “no longer be able to buy the homes that they have traditionally been able to buy. We are protecting them out of their homes! The qualified-mortgage rule should have been called ‘quitting mortgages’ because that’s what it’s all about. So I think I’ve got the argument that is very compelling and people feel it,” says Mr. Hensarling. “They’re less free and less prosperous.”
A spokesperson for the House Financial Services Committee made the following statement regarding President Obama’s decision to visit the temporary headquarters of the CFPB today:
“It’s pretty bold for President Obama to visit an agency mired in controversy over employee discrimination that’s also leasing office space in a building owned by an Obama bundler while its Washington headquarters undergoes a $216 million renovation – waterfall and all. Millions of Americans are struggling in this economy, and the CFPB and Dodd-Frank make that struggle more difficult. It’s now harder for low and moderate-income Americans to buy a home, services like free checking are being eliminated, credit card fees are going up and fewer low-income Americans can afford to access traditional banking services. The intended beneficiaries of Dodd-Frank and the CFPB are worse off. Dodd-Frank has proved to be the financial equivalent of Obamacare.”Read More
“Dodd-Frank is every bit as far-reaching in its harmful consequences for struggling Americans as Obamacare. Thanks to Dodd-Frank, it is harder for low and moderate income Americans to buy a home and there are fewer community banks serving the needs of families and small businesses. Thanks to Dodd-Frank, farmers face higher costs in managing their risks, which leads to higher prices for every American trying to put food on the table. Services that bank customers once took for granted like free checking are being eliminated due to the high costs of Dodd-Frank’s regulatory burden. Another White House meeting between President Obama and an army of Washington regulators won’t do anything to help stressed families. Instead, the President should get on the phone with Harry Reid and urge him to bring up the dozens of bipartisan jobs and regulatory relief bills passed by the House.”
During the 113th Congress, the House has passed 23 bipartisan, pro-jobs bills that originated in the House Financial Services Committee.
Although this week’s Jeopardy! contestants couldn’t name the agency, the unaccountable CFPB is certainly making a name for itself in all the wrong ways.
Here are five more answers that probably ended up on the cutting room floor in the Jeopardy! Studio:
President Obama recently voiced concerns about the negative impact of “endless regulations” in foreign countries. Millions of unemployed and underemployed Americans must be wondering why he isn’t as concerned about the economic harm caused by the “endless regulations” of his own administration here in the U.S.A.
While the American people are repeatedly told that nothing is getting done in Washington, struggling small business owners and entrepreneurs across our nation can only wish that were true. They know better than anyone that the Washington bureaucracy is busier than ever churning out red tape.
Washington set a new record in 2013 by issuing final rules consuming 26,417 pages in the Federal Register. Another 3,305 regulations are moving through the pipeline at the historic rate of roughly one new regulation every two hours.
Job number one of the Financial Services Committee is job creation and economic growth. That’s why the committee has passed dozens of bipartisan, pro-jobs bills during the 113th Congress. Yet Harry Reid has killed them, refusing to even bring them up for votes. Instead, he adds them to the pile of jobs bills collecting dust in the do-nothing Democrat-controlled Senate.
If President Obama truly cares about the harm caused by “endless regulations,” he should pick up the phone today, call Senator Reid and urge him to take action on these bipartisan jobs bills.Read More
Your move, Senate.
During the 113th Congress, the House has passed 23 bipartisan, pro-jobs Financial Services Committee bills, including two that were approved by the House earlier this month with strong support from Republicans and Democrats. A list of those House-approved bills follows:
Your move, Senate. Let's get America back on track.
| GAO: CFPB Should Take Steps to Protect Consumer Data
Collected From Banks
|CFPB collecting data on 600 million credit accounts
despite privacy, security risks
|CFPB Must Improve Financial Data Security: GAO|
|Report: The Federal Consumer Watchdog Has Data on Up to 600 Million Credit-Card Accounts|
“It literally took an act of Congress to obtain this information because the unaccountable CFPB would not answer our questions,” said Chairman Hensarling. “The American people are rightfully worried about the massive amounts of private information government collects on their personal lives, especially in this age of criminal hackers, data breaches and identity theft. This report reveals troubling deficiencies in the CFPB’s data security procedures and privacy controls, as well as an apparent effort by the CFPB to skirt the consumer privacy protections required by Congress in both the Dodd-Frank Act and the Paperwork Reduction Act.
“As the GAO report notes, the CFPB is collecting information on hundreds of millions of credit card accounts. But the credit card database is just the tip of the iceberg. It is merely one of 13 massive data collection programs the CFPB has undertaken, and the numbers are staggering. These programs include the collection of 11 million credit reports monthly, 195 million mortgages monthly, 700,000 monthly auto sales transactions linked with consumer credit data, plus the National Mortgage Database, which was not fully examined by the GAO as part of this report.
“It seems the CFPB is trying to out-NSA the NSA when it comes to accumulating information on Americans. This is, without a doubt, an unwarranted and shocking intrusion into the privacy of American citizens. How exactly does the CFPB’s effort protect consumers?” Chairman Hensarling added.
Congress passed legislation in January requiring the GAO to examine the CFPB’s data collection efforts after the CFPB refused to disclose information to Congress about the scope of its program. The GAO study also satisfies requests made by Senator Mike Crapo (R-ID) and Reps. Shelley Moore Capito (R-WV) and Carolyn Maloney (D-NY).
Click here to read the GAO report.
American Banker | House Lawmakers Press FSOC for More Transparency
Wall Street Journal | Yellen's Discretion
Wall Street Journal | Dodd-Frank's Collateral Damage in Africa
Wall Street Journal | The Outlook: Fed Sizes Up Alternate Rate-Hike Paths
Pittsburgh Tribune-Review | Risk and Compliance Specialists in Demand
The Hill | Greenspan: Congress Should Kill Ex-Im Bank
Business Insurance | Insurance Groups Hail House Approval of Capital Standards Bill
Daily Caller | Dodd-Frank Agency Flopping
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