Bureau director and GOP members go back and forth in fiery Financial Services Committee hearing.
CFPB Director Rohit Chopra on Wednesday received a decidedly hostile reception from Republicans during his end-of-year testimony before the House Financial Services Committee.
“You are changing the law,” Rep. Andy Barr, R-Ky., told Chopra. “You are not Congress.”
Rep. Blaine Luetkemeyer, R-Mo., told the agency head he was “either uninterested or too lazy” to use the proper regulatory process. “You just made that up here,” he later added regarding agency policy. “This is scary stuff.”
The harsh rebukes from GOP members were even more important since Republicans will control the committee’s agenda when they take control of the House next year.
Rep. Patrick McHenry, R-N.C., who will chair the committee, promised that the panel will conduct rigorous oversight of the agency and that Chopra will be called to testify on a regular basis.
“Without proper oversight this system of government does not work well,” McHenry said.
To a large degree, Republican members accused Chopra of issuing guidance and press releases in lieu of using the regulatory process that requires soliciting comment on proposed rules.
“You’ve clearly decided to regulate by press release,” said Rep. Ann Wagner, R-Mo.
Response From Chopra
Chopra responded that the CFPB is attempting to issue more guidance to industry stakeholders in an effort to bring clarity to the consumer protection industry, and stating that, “Guidance does not create any new force of law.”
Rep. Ed Perlmutter, D-Colo., said that guidance can be useful for the financial services industry, and that “you want to get the heads-up” about agency policy.
Chopra agreed, saying that, “We want to provide the clarity,” and adding, “Our goal is transparency.”
In prepared testimony, Chopra said he believes that the bureau and members of Congress can work on a bipartisan basis on several issues, including:
–Ensuring that payment systems are neutral and nondiscriminatory by eliminating the incentives for companies to use control over payments to favor their other interests.
–Limiting the collection, use and sharing of personal financial data. “The CFPB will be looking closely at ways to better protect privacy in areas under our jurisdiction, including, for example, the collection and distribution of personal data in credit reporting and the use of data authorized by a consumer under the CFPB’s personal financial data rights rulemaking,” he said.
Chopra listed several other issues without elaborating on them, including overhauling the property appraisal process, expanding awards for whistleblowers, and protecting relationship banking.
Letter From Credit Union Group
In advance of the meeting, Brad Thaler, NAFCU’s vice president of legislative affairs, sent a letter to Financial Services Committee members asking them to address specific issues affecting credit unions.
He said that Congress should use its statutory authority to exempt credit unions from onerous rules.
“It is incumbent upon the CFPB to provide some degree of regulatory relief for small entities that cannot afford to comply with complex rules and would otherwise be forced to stop offering services to members,” the letter states.