Sec. 2. Findings; sense of Congress
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The Congress finds the following: The Dodd-Frank Wall Street Reform and Consumer Protection Act ( Public Law 111–203 ) ( Dodd-Frank ), was signed into law on July 21, 2010, in order to, among other things, advance the goals of protecting consumers from unfair, deceptive and abusive financial services practices and products that led to the 2008 financial crisis. Title X of Dodd-Frank established a new Federal independent watchdog, commonly known as the Consumer Financial Protection Bureau ( Consumer Bureau ), with broad authority to ensure all hardworking American consumers are given clear, accurate information that they need to shop for mortgages, credit cards, and other consumer financial products or services and to protect consumers from hidden fees, abusive terms and other unfair, deceptive, or abusive practices through strong enforcement of Federal consumer financial laws.
Before the Consumer Bureau was established, Federal financial regulators were tasked with the dual responsibilities of supervising institutions for safety and soundness and compliance with consumer protections under Federal consumer financial laws. These agencies often prioritized the profitability of their regulated entities over the protection of consumers, even when institutions were found to have engaged in practices detrimental to their own customers’ financial well-being.
Congress purposefully created the independent Consumer Bureau within the Federal Reserve System to address past regulatory gaps in our country’s financial services regulatory regime, in which Federal financial regulators were too reluctant to exercise their rulemaking and enforcement authorities to protect consumers from the misdeeds of their regulated entities, that resulted in the most severe global financial crisis since the Great Depression. In doing so, Congress explicitly laid out in statute the Consumer Bureau’s purpose, five objectives, and six primary functions.
Specifically: Section 1021(a) of Dodd-Frank states that the Consumer Bureau, shall seek to implement and, where applicable, enforce Federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and competitive . Section 1021(b) of Dodd-Frank authorizes the Consumer Bureau, to exercise its authorities under Federal consumer financial law for the purposes of ensuring that, with respect to consumer financial products and services—(1) consumers are provided with timely and understandable information to make responsible decisions about financial transactions;
(2)consumers are protected from unfair, deceptive, or abusive acts and practices and from discrimination;
(3)outdated, unnecessary, or unduly burdensome regulations are regularly identified and addressed in order to reduce unwarranted regulatory burdens;
(4)Federal consumer financial law is enforced consistently, without regard to the status of a person as a depository institution, in order to promote fair competition; and
(5)markets for consumer financial products and services operate transparently and efficiently to facilitate access and innovation. . Section 1021(c) of Dodd-Frank establishes the primary functions of the Consumer Bureau to be,
(1)conducting financial education programs;
(2)collecting, investigating, and responding to consumer complaints;
(3)collecting, researching, monitoring, and publishing information relevant to the functioning of markets for consumer financial products and services to identify risks to consumers and the proper functioning of such markets;
(4)subject to sections 1024 through 1026, supervising covered persons for compliance with Federal consumer financial law, and taking appropriate enforcement action to address violations of Federal consumer financial law;
(5)issuing rules, orders, and guidance implementing Federal consumer financial law; and
(6)performing such support activities as may be necessary or useful to facilitate the other functions of the Bureau. . Under Dodd-Frank, the Deputy Director of the Consumer Bureau shall serve as the Acting Director in the absence or unavailability of the Director, until the President appoints and the Senate confirms a new Director. Despite the clear legislative history underscoring the importance of having an independent Federal agency and the plain letter of the law establishing a succession order to fill a vacancy in the Director’s position, when the Consumer Bureau Director Richard Cordray resigned in November 2017, President Trump refused to recognize the Deputy Director as the rightful head of the agency and instead unlawfully installed Mr. Mick Mulvaney, the Director of the White House Office of Management and Budget, to serve as the Consumer Bureau’s Acting Director. This appointment of a White House cabinet official to run the Consumer Bureau raises profound conflict of interest questions and undermines the vital independent nature of the agency. In addition to the illegality of Mr. Mulvaney’s appointment, there is another problem. The position of an Acting Director is, by its nature, still intended to be a temporary assignment to maintain the status quo at an agency, until the President appoints and the Senate confirms, a permanent Director. Nevertheless, Mr. Mulvaney’s temporary status leading the agency has been characterized by drastic and severe changes of the Consumer Bureau’s daily operations and priorities. The daily operations of a Federal agency are guided by its official mission contained in its long-term strategic plan. The Consumer Bureau’s mission should embrace both the spirit and letter of the law, by fully recognizing the agency’s statutory purpose, objectives, and functions. It is troubling that the Consumer Bureau, under its new Trump Administration appointed leadership, issued a Strategic Plan for Fiscal Year ( FY ) 2018–FY 2022, that appears to deemphasize the core mandate under section 1021(a) of Dodd-Frank to, enforce Federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services , by not referencing the importance of enforcement in its mission. Instead, it emphasizes financial education by stating that the agency’s new mission is merely, [t]o regulate the offering and provision of consumer financial products or services under the Federal consumer financial laws and to educate and empower consumers to make better informed financial institutions . This is in stark contrast from the Consumer Bureau’s Strategic Plan for FY 2013–FY 2017, which had an agency’s mission of helping, consumer finance markets work by making rules more effective, (emphasis added). by consistently and fairly enforcing those rules , and by empowering consumers to take more control over their economic lives Mr. Mulvaney has been praised by the White House for his efforts to undermine the Consumer Bureau, even with one anonymous advisor acknowledging in a July 24, 2018, Politico article that, His mission was to blow that up, which he has. He is very well-suited to the chaos. . Mr. Mulvaney’s misguided actions have included, among other things— stopping payments from the Civil Penalty Fund to harmed consumers; trying to unjustifiably reduce the Consumer Bureau’s funding by initially requesting $0 be transferred from the Federal Reserve Board of Governors to carry out the agency’s work and by arbitrarily directing staff to cut the agency’s budget by one-fifth; politicizing the work of the Consumer Bureau by making unusual efforts to fill the independent agency with political appointees; dropping existing lawsuits and investigations into abusive payday lenders; stripping away the enforcement powers of the Office of Fair Lending and Equal Opportunity; changing the role of the Office of Students and Young Consumers and, according to an August 27, 2018, resignation letter from Seth Frotman, the Consumer Bureau’s former Assistant Director and Student Loan Ombudsman, when new evidence came to light showing that the nation's largest banks were ripping off students on campuses across the country by saddling them with legally dubious account fees, Bureau leadership suppressed the publication of a report prepared by Bureau staff ; abandoning the accepted and efficient practice of having its examiners review, as part of their routine examinations, creditors’ compliance with the Military Lending Act in order to ensure the detection and assessment of risky activities that could jeopardize vital protections provided to active-duty servicemembers and their families; creating an Office of Cost Benefit Analysis that prioritizes businesses’ expenses over harm caused to consumers, and unduly constrains oversight of the Consumer Bureau’s regulated entities; freezing data collection to the detriment of supervision and enforcement; seeking to block the publication of the nature of consumers’ complaints and how entities resolved them in the publicly available and transparent Consumer Complaint Database; and restricting key input and feedback from a wide range of external stakeholders by effectively terminating members’ positions on three advisory boards, including the statutorily mandated Consumer Advisory Board. The new leadership of the Consumer Bureau’s repeated attempts to hamstring the good work and the capacity of dedicated professional, career Consumer Bureau staff to hold bad actors accountable for their misdeeds will inevitably harm consumers and distort the functioning of fair and competitive consumer marketplaces, and nonsensically repeats the mistakes made by the Federal financial regulators that contributed to the global financial crisis. Despite the fact that the agency has been referred to as the Consumer Financial Protection Bureau since it opened its doors over seven years ago, its new political leadership also opted to change the agency’s well-known name. Although this decision is supposedly intended to ensure that the agency is in compliance with Dodd-Frank, when this change is viewed in conjunction with the other detrimental actions to undermine the effectiveness of the agency, it can only be interpreted as an attempt to reduce the public’s awareness of, and significant support for, the agency’s role as the top Federal consumer cop as well as to obscure the public’s ability to identify easily the appropriate Federal agency to contact when faced with predatory behavior by financial actors. As such, while some may view this particular decision as minor, the action serves as an important symbolic, and literal, maneuver by the Trump Administration, through its unlawful appointment of Mr. Mulvaney, to diminish and undermine the consumer-focused mission of the Consumer Bureau. Dodd-Frank gives the Director of the Consumer Bureau broad administrative and executive powers to, among other things: fix the number of, and appoint and direct, all employees of the agency; direct the establishment and maintenance of divisions or other offices within the agency; determine the character of, and the necessity for, the obligations and expenditure of funds; and the use and expenditure of funds. These powers, however, are required to be exercised in a manner consistent with carrying out the responsibilities under Title X of Dodd-Frank, which includes complying with the enumerated Federal consumer financial laws under the Title, and satisfying the obligations in other applicable laws. The new politically controlled leadership’s destructive actions have demonstrated the need for legislation to reorient the Director’s discretionary authority to ensure the maintenance of all statutorily mandated policies, functions, and offices of the Consumer Bureau regardless of who is leading the agency. The following is the sense of Congress: The Consumer Financial Protection Bureau should meet its statutory purpose in a transparent and accountable manner by operating in a way that is consistent with both the spirit and letter of the law, which dictates that the agency’s mission should fully reflect the agency’s statutory purpose, objectives, and functions. Dodd-Frank underscores that the agency is designed to serve as an independent Federal agency that is primarily focused on the protection of all consumers, without any undue influence of partisan whims and special industry interests, in carrying out its responsibilities and duties. The official name of the agency should be consistent with this mandate and should, figuratively and literally, put Consumers first by reverting to its better-known name as the Consumer Financial Protection Bureau . The statute establishing the Consumer Bureau has been grossly misinterpreted under the new political leadership, in a manner that is inconsistent with the agency’s statutory purpose, objectives, and functions, with just one example of which is Mr. Mulvaney’s inane suggestion that the statutory requirement for the Director to appear before relevant Congressional Committees to discuss its semi-annual reports could be interpreted as requiring the Director merely to attend a hearing and not answer questions, despite the well-established interpretation of similar statutory requirement for the Chair of the Federal Reserve Board of Governors to appear before the House Financial Services Committee and the Senate Banking, Housing, and Urban Affairs Committee on a semi-annual basis about the monetary policy report, as required by the Humphrey-Hawkins Full Employment Act. In the face of such blatant, and disrespectful, attempts to warp the authorizing and oversight role of the first branch of the Federal government—the United States Congress—by the Trump Administration, Congress must, in this instance, now refine the Consumer Bureau’s authority to ensure that the vital role that the Consumer Bureau should be playing within the country’s financial regulatory regime is not effectively destroyed by the agency’s current leadership. While the legislation is a direct response to address many of the misguided decisions that have been orchestrated by the new political leadership at the Consumer Bureau that have been exposed to the public, as of the date of the bill’s introduction, and sharply criticized by numerous Federal and state officials, including law enforcement, as well as organizations representing servicemembers, senior citizens, and other vulnerable consumer populations, this legislation should not be viewed as an exhaustive list to fix all the damaging actions that may have otherwise occurred at this agency since the departure of former Director Cordray in November 2017, particularly since detailed information revealing the full scope, nature, and extent of the current flawed operation of the agency, and the adverse impact resulting from these actions, may not yet be publicly available. Rather, this legislation should be interpreted as an attempt to highlight, and resolve, a small sample of some of the publicly known egregious statements, decisions, and actions that have occurred during the disastrous tenure of the new political leadership at the agency.
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- Pub. L. 111-203
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Sec. 2
Findings; sense of Congress
Pub. L.Pub. L. 111-203
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