Sunday, March 20, 2011

Chamber and Business Groups Ask Treasury to Follow Six Points on Setting Up CFPB

A consortium of business groups, including the U.S. Chamber of Commerce, has presented Congress and Treasury with six recommendations on developing an effective and transparent Consumer Financial Protection Bureau (CFPB) that strikes a balance allowing the CFPB to fulfill its consumer protection mandate while ensuring that small businesses continue to have access to credit.

In the letter, the industry-groups offered their support for sound consumer protection regulation that weeds out fraudulent and predatory actors and ensures that consumers receive clear and concise disclosures about financial products, but pointed out a number of potential threats to small businesses. The letter was sent to Secretary Geithner, Senate Banking Committee Chair Tim Johnson (D-SD)and Ranking Member Richard Shelby (R-ALA; and House Financial Services Chair Spencer Bachus (R-ALA, and Ranking Member Barney Frank (D-Mass).

First, the Bureau must develop an effective and efficient structure to facilitate both protecting consumers and promoting growth. Second, it must prevent duplicative and inconsistent regulation. Third, the Bureau must preserve small business access to credit. Regulations should not eliminate, or make impractical, the credit products that small businesses rely on for capital. Fourth, it must ensure coordination with Federal and State prudential regulators. The Bureau should involve prudential regulators early and often to ensure proper consideration of safety and soundness issues. Fifth, it must rationalize disclosure. Sixth, the Bureau should defer rulemaking until after Senate confirmation of a Director. Issuing rules prior to the Senate confirming a Director for the Bureau will prevent Congress from exercising the one avenue for oversight that it expressley retained.