Seeking to inject more transparency into the Consumer Financial Protection Bureau (CFPB), Rep. Sean Duffy, R-Wis., has introduced legislation designed to do just that.
American Banker reported that Duffy, along with co-sponsor Rep. Ed Perlmutter, D-Colo., introduced legislation that would require the CFPB director, currently Mick Mulvaney, to provide “guidance” that “is necessary or appropriate to enable the Bureau to carry out federal consumer financial law, including facilitating compliance with such law.”
The law would also prevent the government watchdog from penalizing institutions that rely on guidance from the CFPB.
“I’m proud to sponsor bipartisan legislation to bring predictability and transparency to the CFPB’s rule-making process,” Duffy said. “The CFPB should focus on its mission to actually protect consumers rather than playing ‘gotcha’ with ambiguous and surprising guidance for mortgage lenders.”
Companies have been objecting to the guidance process by the CFPB, which they say is more like a binding regulation. The Senate, noted the report, recently overturned a CFPB guidance from 2013 that prevents indirect auto loan markups after it was found to be a rule by the U.S. Government Accountability Office. A House vote on that Senate move is slated to happen this week.
Under the Duffy bill, the CFPB would have to put limits in place to provide answers when companies ask for guidance, and create a process for amending and, in some cases, revoking guidance.
The legislation comes as the CFPB, under the direction of Mulvaney, is scaling back some of the rules put in place under the Obama administration. That has resulted in some states stepping up to hold financial companies accountable.
Financial Times recently reported that some state attorney generals, including in New Jersey and Pennsylvania, have announced plans to enhance the resources focused on protecting consumers from financial scams and deceptions. The Maryland General Assembly has created a new commission focused in the same area. Other states are also stepping up enforcement, with West Virginia joining Massachusetts in suing Equifax, the credit scoring agency that was hacked to reveal the information of 145 million consumers.