The Consumer Financial Protection Safety and Soundness Improvement Act of 2013 () is a bill that would restructure the

Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) is an agency of the United States government responsible for consumer protection in the financial sector. CFPB's jurisdiction includes banks, credit unions, securities firms, payday lenders, mortg ...

(CFPB) by transforming it into a five-person commission and removing it from the

Federal Reserve System The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...

. The CFPB would be renamed the "Financial Product Safety Commission." This bill is also intended to make overturning the decisions about regulations that the new commission makes easier to do. The Consumer Financial Protection Safety and Soundness Improvement Act of 2013 was introduced into the

United States House of Representatives The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the Lower house, lower chamber of the United States Congress, with the United States Senate, Senate being ...

during the

113th United States Congress The 113th United States Congress was a meeting of the legislative branch of the United States federal government, from January 3, 2013, to January 3, 2015, during the fifth and sixth years of Presidency of Barack Obama, Barack Obama's presiden ...

Background

The Consumer Financial Protection Bureau (CFPB) is an independent federal agency that holds primary responsibility for regulating

consumer protection Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent business ...

with regard to financial products and services in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

. It is supposed to protect the public from "risky or fraudulent financial products" and it has the power to issue regulations in order to accomplish this goal. The CFPB was created in 2011 after its conception was included as part of the

Dodd–Frank Wall Street Reform and Consumer Protection Act The Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd–Frank, is a United States federal law that was enacted on July 21, 2010. The law overhauled financial regulation in the aftermath of the Great Recessi ...

, which passed as a response to the

financial crisis of 2007–08 Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...

that played a significant role in creating the

Great Recession The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At ...

and was signed into law by President

Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, Obama was the first African-American president of the U ...

. The jurisdiction of the bureau includes banks,

credit union A credit union, a type of financial institution similar to a commercial bank, is a member-owned nonprofit organization, nonprofit financial cooperative. Credit unions generally provide services to members similar to retail banks, including depo ...

s, securities firms,

payday lender A payday loan (also called a payday advance, salary loan, payroll loan, small dollar loan, short term, or cash advance loan) is a short-term unsecured loan, often characterized by high interest rates. The term "payday" in payday loan refers to ...

s, mortgage-servicing operations, foreclosure relief services,

debt collector Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. The ...

s and other financial companies, and its most pressing concerns are mortgages, credit cards and

student loans A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. It may differ from other types of loans in the fact that the interest r ...

, according to Director

Richard Cordray Richard Adams Cordray (born May 3, 1959) is an American lawyer and politician serving as the COO of Federal Student Aid in the United States Department of Education. He served as the first director of the Consumer Financial Protection Bureau (CFP ...

. The CFPB has been challenged more than once as being unconstitutional.

Provisions of the bill

''This summary is based largely on the summary provided by the

Congressional Research Service The Congressional Research Service (CRS) is a public policy research institute of the United States Congress. Operating within the Library of Congress, it works primarily and directly for members of Congress and their committees and staff on a c ...

, a

public domain The public domain (PD) consists of all the creative work A creative work is a manifestation of creative effort including fine artwork (sculpture, paintings, drawing, sketching, performance art), dance, writing (literature), filmmaking, ...

source.'' The Consumer Financial Protection Safety and Soundness Improvement Act of 2013 would amend the Consumer Financial Protection Act of 2010 to authorize the Chairperson of the

Financial Stability Oversight Council The Financial Stability Oversight Council (FSOC) is a United States federal government organization, established by Title I of the Dodd–Frank Wall Street Reform and Consumer Protection Act, which was signed into law by President Barack Obama on ...

to issue a stay of, or set aside, any regulation issued by the

(CFPB) upon the affirmative vote of the majority of Council members (currently, two-thirds), excluding the Director of the Bureau. The bill would require the Council, upon the petition of a member agency of the Council, to set aside a final regulation prescribed by the CFPB if the Council decides that such regulation is inconsistent with the safe and sound operations of U.S. financial institutions. (Currently the Council is merely authorized, upon petition, to set aside a final regulation if it would put the safety and soundness of the U.S. banking system or the stability of the U.S. financial system at risk.) The bill would repeal: (1) the prohibition against Council set-aside of a regulation after expiration of a specified time period, and (2) mandatory dismissal of a petition if the Council has not issued a decision within such time period. The bill would require the CFPB Director, when prescribing a rule under federal consumer financial laws, to consider its impact upon the financial safety or soundness of an insured depository institution.

Congressional Budget Office report

''This summary is based largely on the summary provided by the

Congressional Budget Office The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the United States government that provides budget and economic information to Congress. Inspired by California's Legislative Analyst's Office that manages ...

, as ordered reported by the House Committee on Financial Services on November 21, 2013. This is a

source.'' H.R. 3193 would amend the statute that authorizes the

(FSOC) to delay implementation or set aside final regulations developed by the

(CFPB). The bill also would require the CFPB, when developing a new rule, to consider the impact of the rule on the financial soundness of an insured depository institution. The

(CBO) estimates that enacting H.R. 3193 would increase direct spending by $5 million over the 2014-2024 period; therefore,

pay-as-you-go Pay as you go or PAYG may refer to: Finance * Pay-as-you-go tax, or pay-as-you-earn tax * Pay-as-you-go pension plan * PAYGO, the practice in the US of financing expenditures with current funds rather than borrowing * PAUG, a structured financia ...

procedures apply. CBO estimates that enacting H.R. 3193 would not have a significant effect on revenues and implementing the bill would not affect discretionary costs. H.R. 3193 contains no intergovernmental or private-sector mandates as defined in the

Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (UMRA''(pdf)https://www.govinfo.gov/content/pkg/USCODE-1995-title2/html/USCODE-1995-title2-chap25.htm (text)] restricts the federal government of the United States, federal imposition of unfunded mandates on ...

and would not affect the budgets of state, local, or tribal governments.

Procedural history

The Consumer Financial Protection Safety and Soundness Improvement Act of 2013 was introduced into the

on September 26, 2013 by Sean Duffy, Rep. Sean P. Duffy (R, WI-7). It was referred to the

United States House Committee on Financial Services The United States House Committee on Financial Services, also referred to as the House Banking Committee and previously known as the Committee on Banking and Currency, is the committee of the United States House of Representatives that oversees t ...

. On November 21, 2013, the committee voted to report the bill 32-25. It was reported alongsid
House Report 113-346
on February 6, 2014. On February 7, 2014, House Majority Leader

Eric Cantor Eric Ivan Cantor (born June 6, 1963) is an American lawyer and former politician who represented Virginia's 7th congressional district in the United States House of Representatives from 2001 to 2014. A Republican, Cantor served as House Minority ...

announced that H.R. 3193 would be on the House schedule for February 11 or 12th, 2014.

Debate and discussion

Republicans argue that this bill would increase the transparency and accountability of the CFPB. They argue that a five-person board would be more accountable and would have to spend more time debating and compromising.

Notes/References

External links

Library of Congress - Thomas H.R. 3193beta.congress.gov H.R. 3193GovTrack.us H.R. 3193OpenCongress.org H.R. 3193House Republican Conference's legislative digest on H.R. 3193
{{DEFAULTSORT:Consumer Financial Protection Safety and Soundness Improvement Act of 2013 (H.R. 3193 113th Congress) Proposed legislation of the 113th United States Congress Consumer Financial Protection Bureau