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House Passes Bill to Dismantle Highly Successful Consumer Financial Protection Bureau
The House of Representatives on Thursday passed legislation to strip much of the financial regulations passed to prevent another 2008 financial crisis, commonly known at the Dodd-Frank Act. The new bill aims to dismantle the powers of the Consumer Financial Protection Bureau, the independent agency established under the Dodd Frank Act to protect consumers and investors. It has saved Americans almost $12 billion since it was created six years ago.
The House passed the Financial CHOICE Act 233-186, along party lines. The bill is not expected to pass the Senate.
Why would such a successful example of responsible government be hated by Republicans who seek to declaw the consumers' financial watchdog group?
Republicans in Congress are focused on eliminating regulations — including many put in place by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act following the financial crisis that peaked in 2008. The Financial CHOICE Act, which passed the House Financial Services Committee on a 34-26 party line vote last week, is the first attempt to do that.
Among other things, the bill does:
- Strip away the agency’s authority to regulate large banks and payday lenders
- Remove its power to prosecute companies that engage in unfair, deceptive or abusive acts or practices
- Eliminate independent funding from the Federal Reserve Bank and give Congress the power to set the CFPB’s budget
- Allow Congress to kill any major financial rules proposed by the agency; both houses would have to give their approval within 60 days
- Stop public access to the CFPB’s database of more than 1.1 million consumer complaints.
Sen. Elizabeth Warren (D-Mass.), who helped create the CFPB, called the CHOICE Act “an immoral choice” that is “an insult to working families.” Warren said it would make mortgages, student loans and small business loans more costly. “I read this bill and I think — why? Why, just eight years after the worst financial crisis in more than 70 years, are Republicans lining up to roll back the rules on Wall Street and make it easier for financial firms to cheat people?” she said in testimony to the House Financial Services Committee.