Rep. Maxine Waters

Representative Maxine Waters (D-CA), Ranking Member of the House Committee on Financial Services, introduced a bill on Friday, September 28, 2018 targeted at the Bureau of Consumer Financial Protection (BCFP or Bureau). Rep. Waters dubbed the bill as the Consumers First Act, but its official title is “H.R. 6972: To require the Consumer Financial Protection Bureau to meet its statutory purpose, and for other purposes."

The bill allegedly seeks to put a cap on the number of political appointees at the Bureau, to bring back enforcement of areas like payday lending, and to return the name of the Bureau to the Consumer Financial Protection Bureau or CFPB as it was called under former director Richard Cordray. However, the text of the bill is not yet available.

“It is clear that President Trump and his Budget Director are doing everything in their power to roll back consumer protections, strip the Consumer Bureau of its resources and prioritize Wall Street at the expense of consumers,” states Rep. Waters about her bill. “My bill, the Consumers First Act, would reverse the harmful changes the Trump Administration has imposed on the Consumer Bureau by restoring the agency’s supervisory and enforcement powers and increasing the transparency and accountability needed for the agency to carry out it’s important mission.”

The Bill is co-sponsored by five Democratic representatives: Rep. Lacy Clay (D-MO), Rep. Emanuel Cleaver (D-MO), Rep. Al Green (D-TX), Rep Carolyn Maloney (D-NY), and Rep. Gwen Moore (D-WI).

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insideARM Perspective

Since the resignation letter of Seth Frotman, the Bureau’s former Student Loan Ombudsman, Congress has taken several actions with a focus on the Bureau. On September 13, a group of democratic senators sent a letter to Acting Director Mick Mulvaney criticizing the Bureau’s direction under his leadership, specifically regarding the alleged politicization of the Bureau, the Bureau's “abandoning consumers” by stopping enforcement in certain areas, and the Bureau’s leadership suppressing publication of a report regarding treatment of students. On the same day the senators sent their letter, the House of Representatives requested a report on a bill that would require compliance guidance from the Bureau. This was followed very closely by the introduction of a similar bill in the Senate.

Rep. Waters’ bill is the latest in this series of actions related to the Bureau. It's difficult to determine what exactly the bill entails, as the text is not yet available. Published summaries indicate certain enhancements to the Bureau’s responsibilities. However, the bill’s title suggests that it wants to require the Bureau to “meet” its already established statutory purpose. This raises an interesting question about the separation of powers.

The role of Congress is to write laws, not to determine whether an entity’s actions fall within the scope of a law -- that role rests with the judicial branch. Since the statutory purpose of the Bureau is already codified, to determine whether a government agency is acting within its purpose and to require it to do so seems a bit outside the scope of Congress. With that said, if this bill seeks to clarify or amend laws that are already on the books, that would be fully within the scope of Congressional power. We will know more once the text of the bill becomes available.


Tags: CFPB

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