Consumer bureau defenders brace for House vote on Dodd-Frank rollback

Consumer bureau defenders brace for House vote on Dodd-Frank rollback
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Some of the Dodd-Frank Act’s staunchest defenders are making a last-ditch effort to kill a bill that would strip much of the 2010 financial regulations.

Progressive lawmakers and political groups are attempting to rally opposition before the House votes on the Financial CHOICE Act this week. That bill, sponsored by House Financial Services Committee Chairman Jeb Hensarling (R-Texas), would roll back much of Dodd-Frank, a long-standing Republican target.

The CHOICE Act is almost certain to pass the House along party lines. It’s largely considered dead on arrival in the Senate, where it would fail to gain enough bipartisan support to overcome a Democratic filibuster.

Even so, liberal lawmakers and allies are speaking out to defend key parts of Dodd-Frank, particularly the Consumer Financial Protection Bureau (CFPB), from future GOP attacks.

The CFPB was established by Dodd-Frank to police predatory lending and other financial fraud that could fall through the cracks of other agencies. Republicans have long called the agency a redundant an unaccountable burden on the U.S. economy, while Democrats fiercely defend the agency’s record of enforcement actions and regulations.

The CHOICE Act would strip the CFPB of its independent agency status and control of its own budget. The bureau would be renamed the Consumer Law Enforcement Agency, and would be run by a director appointed by the president. Its budget would be controlled by Congress, meaning a GOP-controlled government could try to defund it entirely to effectively eliminate the agency.

“The best form of consumer protection is competitive, innovative, transparent markets that are vigorously policed for force and fraud,” Hensarling said Tuesday on MSNBC’s “Morning Joe.”

“But the so called CFPB in many cases has actually hurt consumers since it has come into fruition."

Rep. Maxine Waters (D-Calif.) Financial Services Committee ranking Democrat, published Tuesday an op-ed panning the GOP’s “baseless attacks” on the CFPB.

“The agency is putting money back in the pockets of hardworking Americans, and keeping the financial marketplace fair and safe,” Waters wrote. “The Consumer Bureau is an invaluable ally to consumers, and its work must continue.”

Waters cited the more than $11 billion CFPB returned to allegedly defrauded consumers under enforcement actions. Under the CHOICE Act, the agency would no longer be allowed to crack down on “unfair, abusive or deceptive practices” through fines and consent orders.

CFPB Director Richard Cordray last week spoke out in defense of his agency's ability to police abusive practices.

“It is abusive to take unreasonable advantage of people’s lack of understanding or inability to protect themselves,” Cordray said. “We are speaking to every institution in that market by setting the expectations they must meet in their own compliance work to avoid similar violations, right away and without excuses."

Progressive non-profits have also tried to kill momentum heading into the House vote. Americans for Financial Reform organized 220,000 signatures to petitions opposing the CHOICE Act, and fellow progressive group Allied Progress called on “federal employees from Trump administration departments and agencies” to share any correspondence with Hensarling.

Hensarling was criticized for telling 12 government agencies not to turn over communications with his the Financial Services Committee in of Freedom of Information Act (FOIA) requests.

Karl Frisch, executive director of Allied Progress, said the campaign for Hensarling’s “unusual and paranoid dismissal of important public records laws has many Americans rightfully wondering what the hell he must be hiding.”

Waters claimed Hensarling sought to shield himself from oversight, while Hensarling defended the letters as a routine measure to ensure the proper level of discretion.

"Congresswoman Waters has known about these letters for more than a month and she never raised any objections or said anything about them until a reporter asked," Hensarling spokesman Jeff Emerson told The Hill in a statement.