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CBA Letter for Record - HFSC Markup
June 10, 2014
Dear Chairman Hensarling and Ranking Member Waters:
The Consumer Bankers Association (CBA)1 commends you for your work on a number of legislative proposals that will make the Consumer Financial Protection Bureau (CFPB) more accessible, and ultimately better for consumers. Increased transparency from the Bureau and greater opportunities for public input are laudable goals. The bills under consideration today fall squarely within our mission: to preserve and promote the retail banking industry as it strives to fulfill the financial needs of the American consumer and small business. CBA supports your Committee’s efforts to make changes to the Bureau which will allow the financial services industry to also better serve consumers.
The Bureau has been gathering greater amounts of consumer data from industry sources, though it has never been clear to the public how their data will be used. With the obvious risk of data breaches proliferating in our society—a risk that has been borne at a cost to consumers, lenders, and others—the creation of an unprecedented database raises understandable concerns. More transparency would help allay these concerns shared by consumers and our industry.
Public input is one of the most important touchstones for the CFPB as it makes policy. As an independent agency headed by a single director, with no formal accountability to the public it regulates, the importance of a formal mechanism for public input through notice and comment rulemaking is paramount. At times, the Bureau appears reluctant to engage in the administrative process necessary to provide that input, relying instead on informal guidance coupled with enforcement actions. In March 2013, for example, the Bureau issued a bulletin describing disparate impact concerns for indirect automotive lending, but did not specify how lenders can ensure full compliance with the Bureau’s legal expectations. This has left the industry with unanswered questions as to how to work with dealers to provide loans that are both responsible and affordable. Notice and comment rulemaking would also mean more opportunities for input that would be both pragmatic and constructive, leading to sounder policy.
To read the full Comment Letter, download the PDF.