Hensarling Says CFPA Draft Language Not A Change

Press Release

Congressman Jeb Hensarling, the top Republican on the House Financial Services Subcommittee on Financial Institutions and Consumer Credit and the lone Member of Congress on the Congressional Oversight Panel (COP) for the Troubled Asset Relief Program (TARP) delivered the following opening statement at today's hearing of the House Financial Services Committee:

"As I read the bill summary of the new CFPA it reminds me of the title of one of my favorite Led Zeppelin works, ‘The Song Remains the Same.'

"If in doubt, read the bill. Section 131 B1 and 136 A1 shows that we still have an agency that can outlaw products and practices that are ‘unfair,' ‘abusive,' or do not constitute ‘fair dealing' -- totally in [it's] subjective opinion.

"Are subprime loans inherently abusive? Tell that to the millions of Americans who have home ownership only because of these subprime loans. Are payday loans inherently unfair? Tell that to the millions of Americans who use them to avoid an eviction notice or prevent the utilities from being shut off.

"What is different? Now, a single unelected bureaucrat, as opposed to five unelected bureaucrats, will have the power to decide whether the Rodriguez family of Mesquite, Texas, can obtain a mortgage. Whether the King family of Athens, Texas, can get a car loan. Or the Shane family of Kaufman, Texas, can even get a credit card in order to buy their groceries.

"For those who persist in wanting to, by government fiat, restrict credit opportunities in the midst of a national credit crunch and when that particularly impacts low and middle income families, this bill is well designed to achieve those goals.

"What else remains the same? Product approval can still trump safety and soundness. Clearly taxpayers are left out of the equation. Pre-emption remains; multiple standards that cost in uncertainty. Taxing; the agency still retains the power to essentially tax the industry, taxes that are passed on to the consumers in the form of higher fees and less credit. Plain vanilla goes from mandatory to highly, highly suggestible.

"The bill supposedly is about consumer protection. The best way we can protect consumers is with competitive markets that encourage product innovation, give customers choices, and by preventing fraud and deception."

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