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Mr. MILLER of North Carolina. I also disagree with the gentleman who just spoke. The reason that all of the Republicans want to talk about whether the commission ought to be five members on a commission or one director is that's the only part of the bill that really can be argued one way or the other. I mean, there are arguments one way or the other. I think it will be a much stronger agency if there is one director, but everything else in the bill really cripples this agency before it can even take hold.
And I also disagree with the argument that everybody here wants to protect consumers. No, they do not. We saw what happened in the last decade, we know who was doing it. It was the most powerful industry in America, and they were making a ton of money by cheating consumers, cheating consumers on credit cards, cheating consumers on mortgages, cheating consumers on overdraft fees, and on and on. And we've heard the same arguments about this that we heard a century ago. A century ago, when Theodore Roosevelt pushed for pure food laws, the meat packers said, do you want government to take away your right to buy meat? Do you want government to take away your freedom to buy beef from diseased animals or spoiled beef? And the American people said yeah, that's exactly what we want. We want to know what we're getting. And Americans want to know what they're getting in financial products too.
Do they want to lose the freedom to get a subprime loan when they qualify for a prime loan? Yes, they do. Do they want to have a credit card, to know what they are getting in a credit card? Yes, they do. Do they want to know what's really in their overdraft fees? Yes, they do. They want to know that there is somebody with their interests at heart who is reading all that fine print that the banks' lawyers wrote to be good for the banks, profitable for the banks, and let the consumer have no idea what's in that little print in the legalese. Yes, they want someone, a strong agency reading that fine print with their interests at heart and saying, no, you can't do that; you can't cheat consumers that way. That's what this agency does, and the American people want it.
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Mr. MILLER of North Carolina. Mr. Chairman, I know that the Republicans' political consultants have said that they need to argue because Americans really do like this agency that is huge and that has dictatorial powers and unchecked accountability. The problem with that argument is that it is completely untrue.
This agency has all of the oversight, more than every other agency has. Before they adopt a rule, they have to let everyone know they're thinking about adopting a rule; they have to take public comment; then they have to propose the rule; then they have to take more public comment. After all that, they can then be taken to court. If the rule is arbitrary and capricious and if there is no evidence to support it, it can be overturned by a court.
There is ample protection in the law already. We do not need the additional check of having the regulators, the supposed watchdogs who did such an abysmal job in the last decade, having a veto over everything they do. There are protections enough already.
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Mr. MILLER of North Carolina. Mr. Chair, it is simply not true that we all here want to protect consumers; we just have an honest disagreement about the best way to do it.
This bill really cripples the ability of the CFPB to be an effective watchdog for consumers. And the way that it does it, probably the most harmful part of the bill, is the veto power, the greater veto power it gives the Financial Services Oversight Council and the way that that council has to exercise that veto.
Here is what the CFPB has to do to pass a rule in the first place. First of all, they cannot require any financial institution to do anything. They can't say, You have to give people this mortgage or this credit card contract. They can just forbid. They can say, You can't use this contract, this mortgage, this credit card contract because this cheats people. They cannot require; they can only forbid.
And before they forbid, before they pass a rule that says, You can't do that because it cheats people, it abuses people, they have got to consider all the benefits to the consumers that might come from that, as well as to the financial institutions that offer it. They've got to consider whether it really reduces the ability of consumers to get credit, and they've got to consider the effect on the financial institutions, and they've got to consult with all the other regulators whose business it is to make sure that the financial institutions don't go broke. And then they've got to publish it. They've got to let people comment. They've got to build evidence. And if they don't have support for the rule, it can be turned over by a court.
But even before it goes to a court, it goes to this panel, this Financial Stability Oversight Council, and it can be vetoed if they decide that it threatens the stability of the financial system or the safety and soundness of the banking system.
This bill changes it and says, not just that they can overturn it, but they have to overturn if it threatens the safety and the soundness of financial institutions; in other words, if it would make specific banks go broke.
Some banks, I agree with what the gentleman from Wisconsin has said repeatedly, most small banks, most credit unions have had honest business practices. But there are some sleazy ones out there, and we saw what they did in the last decade.
Under the bill, as it is written, if one of those banks comes forward and says, Unless we can do this sleazy thing, we're going to go out of business, the Financial Stability Oversight Council has to disallow it if it would put them out of business.
Mr. Chairman, some of those banks, some of those sleazy, scuzzy banks need to be out of business. If the only way they can stay in business is by cheating consumers, they should be out of business. But this bill would not allow that to happen. A consumer protection rule could not go into effect if it put specific banks out of business. That's an enormous change, and it cripples the ability of the CFPB to be an effective watchdog for consumers.
What this amendment does is, if any one of those prudential regulators, those watchdogs that are supposed to make sure the banks don't go broke is going to challenge any rule of the CFPB, they have got to say exactly how they think it would threaten the safety and soundness of the financial institutions, make a bank go broke, and they've got to say who they are, who is this rule going to put out of business. Because the American people are entitled to know if this agency, this FSOC, the Financial Stability Oversight Council, is acting on behalf of the American people and on behalf of the consumers or if they are protecting sleazy banks that stay in business whose whole business model is cheating consumers.
I reserve the balance of my time.
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Mr. MILLER of North Carolina. Sometimes it really is helpful, when you want to amend the law, to read the law. This amendment is almost completely redundant, and where it is not redundant, it is annoyingly pointless.
This is what the law already requires:
Before the CFPB can adopt a rule, it has to consider the potential benefits and costs to consumers and to the financial industry. It has to consider the impact of the rule. It has to consider whether it constricts credit, whether it makes it harder for small businesses or individuals--households--to get credit. All this amendment would require is already in the bill.
The CFPB's rulemaking requires that they give notice that they're going to consider a rule, and then they've got to take comment. Then they've got to propose a rule, and then they've got to take comment again. They know that, if anybody is against it, they've got to be prepared to defend it in court, and they've got to show that they developed the evidence that supports the rule and supports what the benefits are and what the costs are and whether it keeps people from getting credit.
What this amendment would also do is to make the CFPB prepare this report when nobody is against it, when everybody is perfectly fine with it, when it doesn't hurt anybody, when it doesn't bother anybody. It's minor. It's procedural. It would still require this silly, pointless report for a rule that nobody is against.
I understand that most Members do not want to make government unwieldy and filled with red tape. This amendment would just make government more unwieldy and filled with more red tape. So I oppose the amendment.
I yield back the balance of my time.