The Committee on Energy and Commerce met in an open markup session on Thursday, October 29, 2009, at 1:00pm in room 2123 of the Rayburn House Office Building to consider H.R. 3126, the Consumer Financial Protection Agency Act of 2009.
A bipartisan manager's amendment to H.R. 3126 was offered and was passed by voice vote. This amendment would preserve the FTC's enforcement authority, install superior requirements for inter-aganecy communication, and preserve FTC jurisdiction in matters of consumer protection. In addition, this amendment would change the proposed Consumer Financial Protection Agency into a 5 member commission, with no more than 3 commissioners from the same political party. Structuring the agency as a bipartisan commission would help insulate it from the effects of shifting political powers and instill a higher level of regulatory consistency in CFPA policy. For a copy of the amendment, click here.
An amendment offered by Rep. Joe Barton, R-TX, would require that the authority of the CFPA would preempt the authority of similar state agencies and would require that state agencies would not be able to issue different, competing regulations. In addition, it would strike language specifically encouraging States to issue more stringent standards. Striking this language would prevent the unnecessary, cumbersome, and job-killing effect of having many different competing regulatory bodies with which businesses have to comply. This amendment would be in keeping with President Obama’s statement on the campaign trail that “we need to streamline a framework of overlapping and competing regulatory agencies.” Given the weakened state of the economy, the last thing Congress should do is discourage job creation by creating duplicative regulatory structures.
This amendment was not agreed to by voice vote. For a copy of the amendment, click here.
An amendment offered by Rep. Steve Scalise, R-LA, would simply require that the Government Accountability Office (GAO) conduct a study on the proposed Consumer Financial Protection Agency’s impact on small businesses. These studies would be completed three and six years after the Agency’s creation and would simply analyze the impact of the increased reporting requirements placed on small businesses by the CFPA. Given that small businesses employ over half the workers in the country and are responsible for 68% of new job creation, the last thing the Congress should do is set policy that increases the burden placed on small business.
The amendment was agreed to by voice vote. For a copy of the amendment, click here.
An amendment offered by Rep. Greg Walden, R-OR, would strike the term “abusive” from H.R. 3126. The terms “unfair” and “deceptive” are fairly well understood in the consumer protection context. Prosecuting acts or trade practices that fall into these categories has been a part of the FTC’s mission for decades. The term “abusive”, however, is a new one. In H.R. 3126, everywhere “unfair” and “deceptive” are used “abusive” also appears, but there is no definition for the term in the bill. Given that the CFPA could interpret this new term however it likes, entities that are regulated would have no idea how the new commission would enforce it.
The amendment was not agreed to, by voice vote. For a copy of the amendment, click here.
An amendment offered by Rep. George Radanovich, R-CA, would strike language in the bill repealing the Magnusson-Moss rulemaking requirements for the FTC. In the 1970’s, the then Democratic Congress created the Mag-Moss procedure because of concerns that the FTC was moving at too fast a regulatory pace (over industries for which it could not be expected to have expertise). Mag-Moss was designed to ensure all of the ramifications of FTC rulemakings would be discovered, weighed, and considered. Already, federal regulations place a significant burden on the economy, with small businesses with less than 20 employees spending more than $7,647 a year per employee in order to comply with Federal regulations. Businesses with over 500 employees spend $5,282 per employee in regulatory compliance. Considering FTC’s broad jurisdiction and the currently complex and delicate nature of the American economy, it is more important than ever that Federal regulations be drafted responsibly. This amendment would help ensure that.
The amendment was not agreed to by voice vote. For a copy of the amendment, click here.
An amendment offered by Rep. George Radanovich, R-CA, and Rep. Phil Gingrey, R-GA, would simply require the Federal Trade Commission to issue an accompanying analysis weighing the potential economic costs and benefits as well as regulatory alternatives with any final rule promulgated by the Commission. The amendment acknowledges that, under the bill, the Federal Trade Commission would no longer have to comply with the Magnusson-Moss rulemaking procedures, and would still grant FTC the ability to use the less thorough APA (Administrative Procedures Act) rulemaking processes. However, given the number and broad range of industries under the Commission’s jurisdiction, the amendment would require the FTC to more carefully and deliberatively weigh the impact on industry and jobs before it issues new regulations.
The amendment was not agreed to, by voice vote. For a copy of the amendment, click here.
An amendment offered by Rep. Lee Terry, R-NE, would preclude state Attorneys General from seeking civil penalties for violations of any CFPA enforced statute or regulation. It would still, however, allow State AG’s to retain their authority to seek injunctive relief for any such violation. Since the goal of H.R. 3126 is ostensibly to make the Consumer Financial Protection Agency the centralized federal consumer financial watchdog agency, it seems contradictory to give 50 different state Attorneys General the power to litigate and seek civil penalties under this law. Elected state Attorneys General are accountable to many different local constituencies and interests which can sometimes place parochial interests over the interests of the entire financial system. By avoiding the creation of 50 different state enforcement mechanisms, this amendment would also be in keeping with President Obama’s statement on the campaign trail that “we need to streamline a framework of overlapping and competing regulatory agencies.”
The amendment was not agreed to, by voice vote. For a copy of the amendment, click here.
H.R. 3126, the Consumer Financial Protection Agency Act of 2009, was reported favorably as amended out of the Committee on Energy and Commerce by a vote of 33-19. For a detailed vote tally, click here.
