Congressman Jeb Hensarling (R-TX) has been elected to a third term as the Chairman of the House Financial Services Committee in the upcoming 115th Congress.
Congressman Hensarling issued the following statement following his election:
"I am humbled by the support and trust of my colleagues to continue my service as chairman of the Financial Services Committee. In the coming Congress, we will continue our important work of helping to grow the economy for all Americans, not just those at the top. We will focus on ending taxpayer-funded bailouts and too big to fail. We will work to hold both Wall Street and Washington accountable, because consumers must be vigorously protected from fraud as well as the loss of their economic liberty. As chairman, I look forward to working with the incoming Trump Administration to advance bold and ambitious solutions that will help make America better, stronger and more prosperous."
The representative for Texas’s 5th Congressional District near Dallas since 2003, Congressman Hensarling was considered by President-Elect Trump to be the next Secretary of the Treasury, before Steven Mnuchin was nominated for that role.
Congressman Hensarling recently made news by sending a letter to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray asking him to provide written assurance that the CFPB will comply with certain limits on executive agencies set forth in prior executive orders and judicial rulings that potentially impact the ARM industry.
The Congressman mentioned several things of particular interest to the ARM industry in his letter to CFPB Director Cordray:
- PHH Corp. v. Consumer Financial Protection Bureau, (United States Court of Appeals, D.C. Cir., Case No. 15-cv-01177): In this case, the D.C. Court of Appeals rules that the CFPB’s single-director structure is unconstitutional. The CFPB has asked for a rehearing in the case. Congressman Hensarling commented in the letter to Director Cordray that because “some of these executive orders were advisory rather than mandatory for independent regulatory agencies, you and your staff may have been previously under the impression that these orders do not apply to the CFPB. However, the PHH decision makes clear that the Constitution requires that the CFPB be treated as an executive agency, and that the CFPB is not, and may no longer be considered to be, an independent regulatory agency.”
- Executive Order 12866: This order, issued by President Clinton in October 1993, mandates that federal agencies “promulgate only such regulations as are required by law, are necessary to interpret the law, or are made necessary by compelling public need, such as material failures of private markets to protect or improve the health and safety of the public, the environment, or the well-being of the American people.”
- Executive Order 13563: This order, issued by President Obama in January 2011, is similar to Executive Order 12866, and says that agencies must propose regulations with justifiable costs and maximized benefits which impose the least possible burden on society. In reference to Executive Order 13563, Congressman Hensarling asks Director Cordray and the CFPB to “comply in full with the requirements of the Executive Orders referenced in the letter prior to issuing any future final rule, including rules governing arbitration agreements; payday, vehicle title, and installment loans; and debt collection.”
Congressman Hensarling’s letter raises issues that are very real to the ARM industry, which have been previously raised during the SBREFA process. The potential costs to agencies to comply with the CFPB’s Outline of Proposed Rules are significant, regardless of whether you are considered a small or large business.