Department Of The Interior, Environment, And Related Agencies Appropriations Act, 2018
Mr. Chairman, I rise in opposition to the amendment. Mr. Chairman, in June, the House passed H.R. 10, the Financial CHOICE Act, with overwhelming support. Section 713 of the Financial CHOICE Act contained language to subject the CFPB to…
Mr. Chairman, I rise in opposition to the amendment.
Mr. Chairman, in June, the House passed H.R. 10, the Financial CHOICE Act, with overwhelming support.
Section 713 of the Financial CHOICE Act contained language to subject the CFPB to the annual congressional appropriations process.
Under the Dodd-Frank Act, the CFPB is funded out of the earnings of the Federal Reserve system. In order to obtain funding, the Director need only submit a letter to the Board of Governors and Federal Reserve each quarter certifying the amounts of funds determined by the Director to be reasonably necessary for carrying out the authorities of the Bureau. The Federal Reserve then transfers the stated amount to the Bureau for operations.
Basically, the Federal Reserve serves purely as an ATM machine for the CFPB, and neither Congress nor the President has the ability to have any input into the Bureau's funding or oversight of whether that funding is spent effectively.
The Bureau's funding is, therefore, different from other regulators that police markets for force and fraud, including the Federal Trade Commission, the Securities and Exchange Commission, Consumer Product Safety Commission, Commodity Futures Trading Commission, and all those which are funded principally through congressional appropriations.
To return to a constitutional structure and create agency accountability, Congress must reclaim its power of the purse over the most potent tools the Constitution gives Congress for conducting oversight of Federal agencies and implementing the real reforms. There can be no consent of the governed if the American people, through their democratically elected Representatives, have no say in how their government spends their hard-earned dollars.
To reassert Congress' power of the purse, the Financial CHOICE Act calls for all the Federal financial regulatory agencies, including the CLEA and FSOC, to be funded through the congressional appropriations process, ensuring that these agencies use their funding effectively and transparently to fulfill their mission of protecting consumers and investors.
Like other executive branch agencies and other regulators that police the markets, the CFPB will have the chance to justify its expenditures to Congress as a part of the appropriations process. Congress can continue to fund programs that provide value to consumers and can stop funding programs that are mired in waste, fraud, and abuse. This is a basic accountability measure, no more, no less.
It seems my good colleague across the aisle is fearful that we may do something to harm that ability. He is afraid of providing accountability for those dollars. That is our basic function and it is our responsibility. We must not miss this opportunity to reestablish separation of powers and restore the constitutional governance to the administrative state.
Mr. Chairman, I reserve the balance of my time.
Mr. Chairman, I yield 1 minute to the gentleman from Kentucky (Mr. Barr).
Mr. Chairman, I yield 1 minute to the gentleman from Pennsylvania (Mr. Rothfus).
Mr. Chairman, I yield 15 seconds to the gentleman from Georgia (Mr. Graves), chair of the Financial Services and General Government Subcommittee.
Mr. Chairman, may I ask how much time I have left.
Mr. Chairman, just to close, I would encourage all the Members to oppose the amendment. It is curious why we have someone here who is fighting the ability of Congress to do its job to provide oversight. So I ask the question: Are we fearful of somebody looking over the shoulder of CFPB? Why? What are they hiding? What are they not doing? What should we be worried about? I think, more than ever, we need to be looking over their shoulder.
Mr. Chairman, I yield back the balance of my time.
Mr. Chairman, it is interesting, some of the debate we are having here this afternoon. We are picking around on the edges of some things and don't really understand the unintended consequences of what we are trying to do here.
The amendment that is here, to try to change the definitions of what a mortgage originator and a high-cost mortgage to facilitate access to credit for purchasing manufactured homes, is going to do just the opposite of what the gentleman is trying to do.
Do you realize that the gentleman from New Mexico (Mr. Pearce), in his district, he has testified in our committee that over 50 percent of the people in his district live in manufactured homes. This is not a little bitty problem of half a dozen people living over on the side. This is a major source of housing for many people.
I can tell you, I have got a story right here from a banker in southeast Missouri who had an individual who has several disabilities, was a very honest man, wanted to come in and take care of a dental problem that he had, and his only collateral was a truck and his manufactured home.
He wanted to make the loan on the manufactured home because he could stretch out the payments and do it at a less interest rate, but he couldn't do that. Why? Because the way the law is
structured, he had to do it on his car loan, and, as a result, it really strained and put difficulties in the way of--put barriers in the way of this individual. So I certainly am opposed to the amendment.
Mr. Chairman, I claim the time in opposition to the amendment.
Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, in June, the House passed H.R. 10, the Financial CHOICE Act, with overwhelming support. Section 733 of the Financial CHOICE Act contained language to remove the CFPB's authority to regulate small- dollar credit.
Federalizing payday loan regulation is unnecessary and harms consumers. The legislatures of several States have determined the respective short-term small-dollar lending solutions that work for their constituents. No State is without small-dollar short-term lending laws and regulation of some kind.
Congress has an obligation not to suspend the Democratic process in the States by delegating to the CFPB Director the authority to impose one unelected man's view on all Americans.
Small-dollar and payday loan products are an unfortunate necessity for many unbanked and underbanked Americans.
What is the APR for losing a job, Mr. Chairman? What is the APR for getting evicted and having your utilities shut off? What is the opportunity cost for struggling Americans no longer having access to this vital lifeline?
Removing the option to utilize a small-dollar short-term loan is likely
to have a very real and very harmful impact on a consumer, forcing them to miss bill payments, shift to the alternative, potential legal options, or exacerbating any number of other conceivable financial emergencies that could arise.
Mr. Chairman, I believe the best way to improve products is to promote competition and offering them, not ban them. The Financial CHOICE Act ensures that the market, not the regulators, is responsible for determining product viability in the marketplace.
Mr. Chairman, CFPB's own study showed that their regulation was going to drive out of business 85 percent of the small-dollar lenders, and they still went ahead. They don't care. They intend to restrict credit to these very people that need the credit.
An FDIC 2015 study shows that 25 percent of the people in this country are either unbanked or underbanked.
How do we solve that problem? How do those folks have access to credit?
The CFPB is not trying to regulate. They are trying to destroy the small-dollar lending market.
Mr. Chairman, I reserve the balance of my time.
Mr. Chairman, I yield 1 minute to the distinguished gentleman from Pennsylvania (Mr. Rothfus).
Mr. Chairman, how much time do I have remaining?
Mr. Chairman, I yield 30 seconds to the gentleman from Georgia (Mr. Graves), the distinguished chairman of the Financial Services and General Government Subcommittee.
Mr. Chairman, I yield myself the balance of my time.
Mr. Chairman, this is really frustrating to me from the standpoint that just a minute ago I gave the figure of 25 percent of our people are either unbanked or underbanked. My good colleague across the aisle said he is not worried that people who are unbanked can't have access to payday lending or short-term lending, and that is just not accurate. That is, quite frankly, in many instances, where people get their credit started. They go to someplace like this because they have a job.
You can't get a payday loan or a small-dollar loan like this unless you have a job. They take the stub of their paycheck and they can go in and say, I have got a job. From there, they are able to then start paying back whatever the loan is that they take out.
I have in front of me also a whole list of groups of folks and individuals here who have utilized short-term small-dollar programs.
Here is Michelle from Fulton, Missouri, in my own district. She says: My frustration to loan access today is that my 20-year-old daughter, who has a full-time, decent-paying job, cannot get a loan to buy her first vehicle. She isn't even able to get a credit card, which you used to be able to just apply for and you would get it. It is a catch-22: you need credit to get credit. But nobody will give you credit to begin with.
This is an opportunity for a lot of people to get their foot in the door to get credit established and, if you have bad credit, to reestablish good credit. And it also helps people to take care of--and I have another whole bunch of stories here about a young man who needed to get a car loan to get his car fixed, as the gentleman from Minnesota indicated.
So, again, Mr. Chairman, I oppose the gentleman's amendment, and I ask everybody else to do so as well.
Mr. Chairman, I yield back the balance of my time.
Mr. Chairman, I claim the time in opposition to the amendment.
Mr. Chair, I yield myself such time as I may consume.
Mr. Chairman, this amendment strikes a provision that subjects the National Credit Union Administration to the annual congressional appropriations process.
My point this afternoon is that Congress must restore its power of the purse, one of the most potent tools the Constitution gives Congress for conducting oversight of Federal agencies and implementing reforms. There can be no consent of the governed if the American people, through their democratically elected representatives have no say in how their government spends their hard-earned dollars.
We must not miss the opportunity to reestablish separation of powers and restore Article I authority, which Congress has given away in so many instances that the administration now has more power than the legislative branch.
The NCUA is a prime example of why it is time to reassert Congress' power of the purse. Accountability and transparency was so lacking under former Chairman Debbie Matz' tenure that, over the course of her tenure, the NCUA budget increased each year, in some cases by double- digit percentages. The Financial Services Committee, in fact, was forced to hold a public hearing during the 114th Congress.
NCUA should not be singled out to avoid accountability to Congress. The CHOICE Act, which was passed by the House with overwhelming support--and the Congressman from Nevada's support as well--subjects all Federal financial regulators to the same congressional appropriations process, including NCUA. There is no reason to single out the NCUA for different treatment from all other regulators, all of whom the House has already voted on to put on appropriations just 3 months ago.
Mr. Chairman, I yield back the balance of my time.