House GOP Bills Attack Consumer Financial Protection Bureau
Promoting her new book, "A Fighting Chance," in near back-to-back appearances on Comedy Central's "The Daily Show with Jon Stewart" and "The Colbert Report," the Massachusetts Democrat describes her own role in setting up the Consumer Financial Protection Bureau before winning a seat in the U.S. Senate. But now that Warren is busy senator-ing, can the bureau survive without her?
%VIRTUAL-article-sponsoredlinks%That's the worry over at the nonprofit consumer research advocacy group Consumer Federation of America, which recently warned of a multi-pronged attack on the bureau from Republicans in Congress. At last count, House GOP members have put forward 11 bills aimed at pulling the teeth of the agency and preventing it from doing its job of protecting American consumers.
Rachel Weintraub, legislative director of the federation, warns that, if passed, "these bills will thwart the progress that CFPB has made" towards "helping consumers and ensuring that our market place is more fair." What's more, if they become law, the bills threaten to "tie [the CFPB's] hands in the future." Here's a quick rundown of five of the more egregious (or just plain silly) legislative acts Congress is proposing:
1. Keep Your Unidentifiable Information Unidentifiable
Are you worried about government agencies collecting personal information about you? Many people are -- and so are some members of Congress. That's why they want to pass the CFPB Data Collection Security Act, permitting consumers to opt out from allowing the bureau to collect personally identifiable information about them.
Of course, the bureau doesn't collect such personally identifying information -- making this law about as useful as a one banning unicorns from grazing on the White House lawn.
2. You Do Not Have the Right to a Trial
Have you ever read the contract that comes with a credit card? You may have noticed a clause that mandates, if you ever get into a dispute with your card company, that you must settle that dispute through arbitration -- and give up your right to sue the card company in court.
The proposed Bureau Arbitration Fairness Act sees absolutely nothing wrong with such a "voluntary" renunciation of your Constitutional right to a fair trial. The bill would forbid the bureau from doing anything to limit credit card companies' right to force you to give up this right.
3. What's Yours Is Ours
What are the chances that a dishonest financial institution, after defrauding you and taking your money, might then up and declare itself insolvent so it doesn't have to pay you back? Think it could happen? If so, then you won't be at all pleased with this next proposed law.
Right now, the CFPB collects the fines it imposes on bad actors, and among other things, uses that money to compensate consumers harmed by banks' misdeeds. The proposed CFPB Slush Fund Elimination Act of 2013 aims to confiscate all that money for the Federal Reserve -- and if the Fed gets the dough, good luck ever getting paid back if you find yourself stung by financial fraud.
4. All the News Printed Won't Fit
The proposed Bureau Research Transparency Act would require the bureau to give context to any reports it publishes, by publishing any studies, data or analyses "related" to the material in its reports, when the latter are published. That seems like an awful lot of trees being needlessly killed in the age of the Internet. A detailed bibliography online should suffice.
5. If We Want Your Opinion, We'll Give It to You
The publication of official reports is only the beginning. The proposed Bureau Guidance Transparency Act would require the bureau to take public comments before so much as issuing "guidance" on how it wants financial institutions to comply with its regulations. Put another way, Congress is saying it would rather the bureau not even voice opinions on how laws should be enforced, until others have had a chance to chime in and tell the bureau what those opinions should be.
Speaking of opinions, these are just five of the opinions that Republican members of Congress are suggesting to the bureau. But they're probably more than enough for you to figure out their general opinion of the bureau: If at all possible, they'd really prefer that the Consumer Financial Protection Bureau did not exist. But failing that, preventing the bureau from doing any good for consumers, or any harm to legislators' Big Banking campaign contributors, will suffice.
Motley Fool contributor Rich Smith has a few bank accounts but owns no stock any financial institution subject to CFPB oversight.