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Rep.Scott Garrett : The CFPB has oversized influence on the U.S. economy because it alone decides which financial products you are allowed to buy

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October 18,2016

the staff of the Ridgewood blog

Ridgewood NJ, after a federal appeals court delivered a strong rebuke to the government’s new “consumer-finance watchdog”, declaring the agency’s unusual independence to be unconstitutional, and ordering its powers be curbed. Rep. Scott Garrett gave us his take on Consumer Financial Protection Bureau (CFPB) . In an email Garret spelled out the issues:

“This week, a federal court found that one of the most secretive Washington bureaucracies violates the constitutionally-mandated system of checks and balances designed to protect Americans from abuses of government authority. The court decided that the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional because of its toxic combination of immense power and little accountability. As Chairman of the Financial Services subcommittee that is responsible for making sure our country has competitive and robust capital markets, I have worked with my colleagues on solutions to restructure the CFPB in a way that protects consumers while holding Washington accountable to We the People.  
The CFPB has oversized influence on the U.S. economy because it alone decides which financial products you are allowed to buy. Everything from mortgages, to car loans, to retirement savings, the CFPB’s current structure allows it to unilaterally infringe on the economic choices of every American.

With a single, politically appointed head and its ability to bypass Congress to get funding, the CFPB acts as a rogue federal bureaucracy.  And while the CFPB has an important mission, it’s unacceptable to allow a single government agency to control how Americans can spend their own money.

In fact, in his decision on this case, Judge Brett Kavanaugh said, “Other than the President, the Director of the CFPB is the single most powerful official in the entire United States Government, at least when measured in terms of unilateral power.” As someone who has been an outspoken critic of this agency’s unchecked power, I completely agree.

To implement consumer protections that actually put people and families first, a complete re-organization of this bureaucracy is needed. I recently supported the Financial CHOICE Act, a bill that would transform the CFPB into a bipartisan, five-member commission which is subject to Congressional oversight and appropriations, just like other independent Washington agencies. This is the only way to ensure that Washington will actually do its job instead of acting in its own self-interest.

This ruling that the CFPB’s structure is unconstitutional is a win for transparency, and for the checks and balances that protect American families from abuses by overzealous government bureaucrats.  While stories like this don’t always make front page news, I feel it’s my responsibility to pass along information about my work and my priorities in Congress to the people of New Jersey’s Fifth District.”

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Federal court rules the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional

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“All government bureaucracies should be accountable to hardworking taxpayers”

October 11,2016
the staff of the Ridgewood blog

Ridgewood NJ,  Financial Services Committee Chairman Jeb Hensarling (R-TX) released the following statement on today’s federal court ruling that the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional:

“This is a good day for democracy, economic freedom, due process and the Constitution.  The second highest court in the land has vindicated what House Republicans have said all along, that the CFPB’s structure is unconstitutional.

“By design the CFPB is arguably the most powerful and least accountable Washington bureaucracy in American history, and it shows.  The Bureau has infringed on the economic freedoms of consumers, limited their financial choices, increased their costs, and failed to hold managers accountable for widespread discrimination and abuse of its own employees.  This must change.  The CFPB has an important mission. Properly designed and led, it is capable of great good. But the Bureau’s bizarre and defective structure allows it to evade the time-tested checks and balances that are necessary to hold it or any other government bureaucracy accountable.  Our Constitution requires these checks and balances to protect our God-given liberties from government abuse.  It is astonishing that the Democrats who voted for the Dodd-Frank Act so casually disregarded their constitutional obligations to the American people.  It’s also astonishing that President Obama illegally bypassed the Senate by appointing Richard Cordray to serve as the Bureau’s Director. It is time to restore the rule of law and Constitutional governance to this nation. While I welcome today’s decision, it’s absurd that a judicial opinion was necessary.

“The Financial CHOICE Act, approved by our committee last month, solves the constitutional defect identified by the court today.  The Financial CHOICE Act replaces the current unaccountable single director with a bipartisan, five-member commission – which is how virtually every independent regulatory agency, including those responsible for consumer and investor protection, currently operates.

“Republican efforts in the Financial CHOICE Act to reform the Bureau are and have always been grounded in the fundamental belief that all government bureaucracies should be accountable to hardworking taxpayers, especially those bureaucracies like the CFPB that can spend hundreds of millions of dollars each year with no oversight or control from Congress or the executive branch; employ an army federal employees; and have a direct impact on the personal finances of virtually every American citizen.”

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Opponents of CHOICE Act Aren’t Interested in Protecting Consumers

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“the CHOICE Act offers us a way out by pointing us towards a system that will allow the market to determine the risk of a financial institution, and make it unlikely that taxpayers will ever be called on again to bail out Wall Street and the bad decisions of regulators who oversee it” Rep. Scott Garrett CD5

Norbert Michel / @norbertjmichel / September 20, 2016
On Tuesday, Sept. 13, the House Financial Services Committee passed the Financial CHOICE Act. Among other needed financial reforms, the bill would make taxpayer-funded bailouts of big banks less likely and ease regulations that hurt community banks.

It’s hardly a surprise that the vote (30–26) was largely along party lines, but some of the anti-CHOICE Act rhetoric was disturbing. Just as with the 2010 Dodd-Frank Act, it appears that fear-mongering and special interest lobbying will prevent real financial reforms from even being debated.

Only one of the bill’s 11 sections deals with reform of the Consumer Financial Protection Bureau (CFPB), but opponents are doing their best to tie this entire debate to the CFPB and Wells Fargo. In the process, they’re presenting Americans with a false choice: leave the CFPB alone and remain safe, or reform the CFPB and drown in fraud.

Ranking member Maxine Waters, D-Calif., proclaimed:

We need to look no further than just last week to see why we need a strong Consumer Financial Protection Bureau, which used its authorities under Dodd-Frank to uncover a massive scheme under which millions of consumer accounts at Wells Fargo were fraudulently opened, with the bulk of this fraud perpetrated in my hometown of Los Angeles.

One serious problem with this logic is that the fraud occurred just prior to 2014, almost two years after the CFPB was up and running. And the CFPB didn’t uncover it.

If the CFPB is so vital for fraud protection, what happened?

But what good is logic when the objective is to scare everyone into believing Dodd-Frank and the CFPB make us safer? Fear-mongering is a tried and true Washington tactic, especially when it comes to financial markets.

And it’s not just politicians who use fear-mongering. Special interest groups use the same ploy, and the retail trade associations’ opposition to the CHOICE Act’s repealing of the so-called Durbin Amendment is the perfect example.

The Durbin Amendment, named after Illinois Senator Dick Durbin, imposed a price cap on the debit card interchange (“swipe”) fees that banks charge for using their cards. Supposedly, retailers everywhere were going to pass these savings on to their consumers.

As was easily predicted, consumers haven’t saved at all. Even Barney Frank admits that consumers didn’t see any benefit from the price cap.

Instead, retailers have benefited from the lower fees without lowering their customers’ prices. Worse, consumers have lost out on low-cost banking services because banks raised other fees to compensate for their lost revenue.

Need more evidence?

It’s not the consumers clamoring for the House to leave price controls in place. It is business and retail trade associations, such as the National Grocers Association, the Society of Independent Gasoline Marketers of America, and the National Restaurant Association.

There’s no doubt that these groups’ members have a difficult time running a profitable business, but so does everyone. Instead of pushing back on the CHOICE Act over one tiny section—one that would benefit millions of consumers—these groups should push for large-scale relief of the regulations that make it so difficult for their members to earn money.

Supporting the types of reforms in the CHOICE Act would be a great place to start.

https://dailysignal.com/2016/09/20/opponents-of-choice-act-arent-interested-in-protecting-consumers/?utm_source=TDS_Email&utm_medium=email&utm_campaign=CapitolBell&mkt_tok=eyJpIjoiTW1KbU9EZ3lOVEV4TldGbCIsInQiOiJqeU1sbkJzK3BJK2dXZlV6d0t3RVljaVNnSStBc3B6VEdqYzl4cWZUa1h0bDBlUnhLN25QeVFqUkt4K242dVREZWhlR25KY1E1Sjc1SVhNUngzT2NqMXJYeHRjSDFvbUxIVFBYQ3J0a1ZmND0ifQ%3D%3D

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2016 Bergen County Campaign Season Kicks off in Pre Labor Day Rally for Rep.Scott Garrett

Scott Garrett

September 6th 2016
the staff of the Ridgewood blog

Wyckoff NJ , the campaign season kicked off a little early with Congressman Scott Garrett holding a rally to an over flow crowd at the Wyckoff public library .Garrett hit on his usual themes focusing deficit reduction, working people keeping more of their own money ,Bergen County rail safety, creating more economic opportunities and focusing his criticism on Dodd Frank and among many things it’s institutionalization of “Too big to Fail”.

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The well attended event featured GOP Chair Paul DiGaetano whipping up the crowd in a further indication of a major shift of Bergen County Republican Organization politics. It is no secret of past strains between the BCRO and the Congressman . DiGaetano’s appearance was a welcome sight to many Garrett supporters who have long looked at the BCRO as the enemy.

Garrett spoke about the Choice Act ,” Washington desperately needs transparency. Dodd-Frank created bureaucracies like the Consumer Financial Protection Bureau that gave immense power to a single, politically appointed director who makes economic decisions on your behalf. The CFPB tells you what financial products you can have or not have because they think they know what’s best for you when it comes to loans, mortgages and car purchases.”

He continued ,”Our plan makes the CFPB, and other unaccountable agencies, into bipartisan commissions. We would also require all financial regulations to undergo strict cost-benefit tests to make sure they’re not doing more harm than good. And we would change the system to ensure that all major financial regulations are approved by Congress before they are imposed on the American people.”

During the Q&A Garrett took a swipe at the Bergen Record’s coverage of him ,reminding a Record reporter that (unlike the Ridgewood blog) no Record reporter has ever come to any of his DC press conferences.

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Rep. Garrett summarized , “Spending more money than we have is dangerously short-sighted and continues to stifle the economic future of our country. I will continue fighting to rein-in Washington’s out-of-control spending so our children and grandchildren can have an opportunity to achieve their own American Dream.”

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Rep Scott Garrett Questions Consumer Financial Protection Bureau on Auto Dealer Sub Prime Lending

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House lawmakers pepper Cordray over dealer reserve

Wednesday, Sep. 30, 2015, 11:59 AM UPDATED 11:28 AM

By Nick Zulovich
Editor

WASHINGTON, D.C. –

Two of U.S. House membesr who are two of staunchest defenders of dealers and how the indirect auto financing model currently operates — one that still includes dealer reserve — peppered the director of the Consumer Financial Protection Bureau who made his semiannual appearance before the Financial Services Committee on Tuesday.

Like many of his fellow lawmakers, Rep. Scott Garrett referenced a series of recent reports from American Banker recapping internal memos and other documents about the CFPB’s use of disparate impact to generate a “tipping point” enforcement action that might discontinue the practice of dealer participation altogether.

The New Jersey lawmaker then directly asked CFPB director Richard Cordray, “Are you working to eliminate dealer reserves?”

Cordray replied with, “We have been working to try to address a practice that we believe is discriminatory, discretionary markups.”

He added that the CFPB is out “not necessarily to eliminate,” dealer participation. “We had an enforcement action (Monday) in which it would limit dealer reserve, not eliminate it. And we think that might be a fair way to try to address the issue,” Cordray went on to say.

What Cordray referenced was the CFPB enforcement action against Fifth Third Bank, which included a mandate to cap dealer markup at either 1.25 percent or 1 percent depending on the length of the vehicle installment contract.

During a back-and-forth exchange between Garrett and Cordray that had each individual interrupt each other multiple times, the House lawmaker insisted he was asking these questions because “dealers are on the front lines of making these loans.”

Cordray replied with how the Dodd-Frank Act was written that created the CFPB four years ago.

“We have authority in the statute. It doesn’t exempt the auto industry. It exempts auto dealers. It doesn’t exempt auto lenders. We have a responsibility to address auto lenders. We understand we are exempted from addressing auto dealers,” Cordray said.

“Congress drew the statute. I didn’t draw it. I have to live with it. It exempts auto dealers, but gives us responsibility over auto lenders. I’m not sure that makes a lot of sense, but we’re trying our best to observe the lines that Congress drew,” he continued.

“It’s a funny provision in the statute. I’m not sure it’s very logical,” Cordray added.

Before Garrett’s time for questioning expired, Cordray also told the lawmaker that vehicle financing is “made by the auto lender. The auto lender controls the auto lending program.”

And with institutions such as Fifth Third Bank as well as American Honda Finance now restricted on how much dealer markup is allowed, Garrett also questioned whether the CFPB understands the implications on dealerships and their ability to generate revenue by these enforcement actions.

“What I would say is this,” Cordray said, “As we do our work … it does effect auto dealers. I would agree with you on that. That’s why the provision is not very logical.”

Finally, Garrett tried to get Cordray to acknowledge the CFPB’s actions are increasing the consumer costs of making a vehicle purchase based on a wide array of studies from the American Financial Services Association, the National Automobile Dealers Association and other organizations.

https://www.autoremarketing.com/subprime/house-lawmakers-pepper-cordray-over-dealer-reserve

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Regulators open probe of student loan practices

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Regulators open probe of student loan practices

By Tim Devaney

Federal regulators are investigating reports that lenders are pressuring college graduates to immediately repay their full student loan debt when a relative who co-signed the loans dies or files for bankruptcy. 

The Consumer Financial Protection Bureau (CFPB) said Tuesday it is probing the phenomenon, which can damage the credit reports of borrowers who are otherwise in good standing.

“Private student loans can sometimes take many years to pay off, and these parents or grandparents may be unaware that their own financial distress or death can lead to a sudden default and demand for payment,” said Rohit Chopra, the student loan ombudsman at the CFPB. 

The CFPB reported it has received more than 2,300 complaints about private student loans over the last six months, many of which concern lenders’ debt collection practices. One theme throughout the complaints was that, in some cases, lenders are collecting on student loans when a co-signor dies but the primary borrower is still alive and paying on time.

Read more: https://thehill.com/blogs/regwatch/finance/204056-consumer-watchdog-investigating-student-loans-defaults#ixzz2ziH33Odu