WASHINGTON, D.C. (WSAU) -- Two of Wisconsin’s members of Congress don’t see eye-to-eye on legislation addressing financial information and regulation.
7th District Republican Sean Duffy is the primary author of H.R. 3193, called the Consumer Financial Freedom and Washington Accountability Act. If signed into law, it would change how the 4-year-old Consumer Financial Protection Bureau operates. Right now, the bureau is under the Federal Reserve. Duffy wants to see it become an independent agency that answers to Congress.
The CFPB independently deals with consumer protection issues involving banks, credit unions, securities firms, mortgage-servicing operations, payday lenders, debt collectors, foreclosure relief services, and other financial companies operating in the United States.
During House floor debate, Duffy said the CFPB collects private information about citizens, much like the National Security Agency. “If you’re an American, and you have a credit card, the CFPB is collecting and monitoring your transactions, so what we’ve done is said, listen, if you are here to protect the consumer, why don’t you ask the consumer for permission and consent to take their information?”
Duffy says the present system removes Congress from managing financial entities, and criticized Democrats for creating a system where small financial institutions are at a disadvantage. “Big banks on Wall Street who created the crisis are given a voice to have rules of the CFPB overturned, but you’ve left the small banks and credit unions in my district voiceless to say this rule is going to hurt us. That’s wrong.”
One of the Democrats critical of Duffy’s bill is 3rd District Congressman Ron Kind. Kind says the CFPB is working well, and Duffy is wrong. “I think what Mr. Duffy is claiming just isn’t true. It’s the big guys finally for the first time subject to review under this consumer financial protection agency, and Lord knows they need greater oversight.”
Kind says the oversight agency is doing it’s job well, and believes we’ve never had this level of consumer protection in the financial sector. “In just a few years, three billion recovered for individuals and families. Over ten million consumers have benefited from it. In fact just recently, the agency took on an independent college because of the abuse of student loans they were engaged in.”
During floor debate, Duffy argued for the reforms to the CFPB, referring to them as, “a dangerously powerful and dangerously unaccountable agency:”
If HR 3193 becomes law, it would replace the Director with a five-member Commission appointed by the president and confirmed by the Senate. It would also subject the CFPB to the regular appropriations process and makes the CFPB a stand-alone independent agency rather than a bureau within the Federal Reserve System. The changes would also prohibit the CFPB from using a consumer’s private, personal financial information without the consumer’s knowledge and consent. Duffy says the CFPB is currently engaged in a massive data collection effort of consumers’ financial information, not unlike how the National Security Agency collects cellphone data.
Congressman Kind believes Duffy’s bill will open the door to another financial crisis. He says, “I had hoped that some of my colleagues in Congress would have learned from the mistakes of the past that led to the worst financial crisis since the Great Depression. Having commonsense rules in place to protect consumers from financial abuses, and making sure those rules are enforced, should not be partisan issues.” Kind says the agency has successfully handled about 270,000 consumer complaints since its inception.
Duffy’s bill passed the House Thursday on a vote of 232 to 182.