CHOICE Act Hearing Focuses on Bank Regulation, Offers Changes to CFPB
The House Financial Services Committee held a hearing on April 26th titled “A Legislative Proposal to Create Hope and Opportunity for Investors, Consumers, and Entrepreneurs” to discuss the provisions of the recently revamped CHOICE Act, a replacement for many of the provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The CHOICE Act is the brainchild of the committee’s chair, Rep. Jeb Hensarling (R- TX). He began the hearing by noting that the American economy is currently operating at half capacity, no banks should ever receive bailouts for poor investment policies, and the un- and underbanked population in America has added 3 million people since Dodd-Frank’s enactment in 2010.
The hearing included a panel of witnesses to answer questions from committee members and provide insight to the Great Recession and the effects of Dodd-Frank. Peter Wallison, a senior fellow at the American Enterprise Institute, noted that the Dodd-Frank Act misdiagnosed the cause of the financial crisis and had slowed American economic recovery ever since. Another witness, Dr. Norbert Michel of the Heritage Foundation, echoed Mr. Wallison’s sentiment and added that the Consumer Financial Protection Bureau (CFPB), an independent agency created under Dodd-Frank, should be abolished and its authority transferred to the Federal Trade Commission.
While much of the discussion at the hearing focused on banking regulations, some committee members did take time to revisit concerns voiced previously about the CFPB at an April 5th hearing. Rep. Andy Barr (R- KY) questioned the constitutionality of the embattled agency, expressing concern that the CFPB preferred to change the rules midstream, violated due process, and needed accountability in the form of Congressional control over the agency’s budget. Rep. Roger Williams (R- TX) added that the CFPB relies on faulty studies to justify enforcement and hides behind limited evidence from their consumer complaint database.
While Rep. Hensarling had hoped to quickly move his signature legislation through the House, House Democrats raised concerns that the bill was not getting enough opportunity for debate. Rep. Emanuel Cleaver (D- MO) reminded Chairman Hensarling that the committee held over forty hearings prior to the passage of the Dodd-Frank Act. Rep. Brad Sherman (D- CA) recommended that the CHOICE Act be separated into smaller bills, each having varying degrees of bipartisan support. Finally, Rep. Maxine Waters (D- CA) informed Chairman Hensarling that the Democratic members of the committee would be scheduling additional hearings on any potential reforms to the Dodd-Frank Act.
The CHOICE Act proposes sweeping changes to bank regulation and consumer protection oversight. In particular, the CHOICE Act seeks to severely limit the authority of the CFPB, stripping it of its rulemaking and supervisory authority, leaving it with the limited responsibility to enforce only the federal consumer protection laws passed by Congress. NAFSA continues to work with Congress to ensure that any changes made to federal regulations benefit Indian Country and opportunities to sustainably grow Native economies.