New CFPA Bill Still Harmful To Small Businesses, U.S. Chamber Says

 
A new House draft bill to create a Consumer Financial Protection Agency continues to pose harmful unintended consequences for consumers, businesses, and the economy, according to the U.S. Chamber of Commerce.

"While we appreciate the House Financial Services Committee's work to address concerns with its original proposal, the latest draft of the legislation fails to resolve the key problems with the proposed CFPA," says David Hirschmann, president and CEO of the Chamber's Center for Capital Markets Competitiveness. "It will still create a giant new bureaucracy, place heavy burdens on small firms, and limit consumer choice."

The Chamber pointed to four areas of the revised consumer protection legislation that remain unchanged. The bill would:

• Give the agency sweeping and ill-defined powers that continue to target businesses outside the consumer financial services industry;
• Provide the CFPA authority to mandate the financial products offered to consumers;
• Fail to resolve conflicts between the CFPA and other financial regulators, continuing the status quo in the current broken system; and
• Fail to bring consistency to consumer disclosure and protections through uniform national standards.
   

Hirschmann calls on Congress to continue to consider alternative approaches that will ensure effective consumer protection without jeopardizing the choices of consumers and the availability of credit for businesses.

Andy Pincus, partner atMayer Brown LLP and  outside counsel to the Chamber, reiterated the Chamber's opposition to the bill during his testimony at a House Financial Services Committee hearing on September 30. A copy of his testimony can be found here.