Consumers First Act

IIB 116TH CONGRESS 1ST SESSION H. R. 1500 IN THE SENATE OF THE UNITED STATES MAY 23 (legislative day, MAY 22), 2019 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To require the Consumer Financial Protection Bureau to meet its statutory purpose, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 05:28 May 24, 2019 Jkt 034408 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1500.RFS H1500 pbinns on DSK79D2C42PROD with BILLS 2 HR 1500 RFS SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 1 (a) SHORT TITLE.—This Act may be cited as the 2 ‘‘Consumers First Act’’. 3 (b) TABLE OF CONTENTS.—The table of contents for 4 this Act is as follows: 5 Sec. 1. Short title; table of contents. Sec. 2. Findings; sense of Congress. Sec. 3. Consumer Financial Protection Bureau. Sec. 4. Conforming amendments. Sec. 5. Executive and administration powers. Sec. 6. Offices of the Consumer Financial Protection Bureau. Sec. 7. Consumer Advisory Board reforms. Sec. 8. Discretionary surplus funds. Sec. 9. Modification of the exemption from certain disclosure requirements. Sec. 10. Limitation on providing exemptions from HMDA reporting require- ments. Sec. 11. Limitation on modifying HMDA data fields. Sec. 12. Maintaining the HMDA Explorer tool and the Public Data Platform API. Sec. 13. Report on fair lending investigations and enforcement actions. Sec. 14. Debt collection. Sec. 15. Credit scores included in free annual disclosures. Sec. 16. Report on senior consumers. Sec. 17. Report on payday loan and car-title loan investigations and enforce- ment actions. Sec. 18. Effective date. SEC. 2. FINDINGS; SENSE OF CONGRESS. 6 (a) FINDINGS.—The Congress finds the following: 7 (1) The Dodd-Frank Wall Street Reform and 8 Consumer Protection Act (Public Law 111–203) 9 (‘‘Dodd-Frank’’), was signed into law on July 21, 10 2010, in order to, among other things, advance the 11 goals of protecting consumers from predatory finan- 12 cial services practices and products that led to the 13 2007–2009 financial crisis. 14 (2) Title X of Dodd-Frank established a new 15 Federal independent watchdog, known as the Con- 16 VerDate Sep 11 2014 05:28 May 24, 2019 Jkt 034408 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1500.RFS H1500 pbinns on DSK79D2C42PROD with BILLS 3 HR 1500 RFS sumer Financial Protection Bureau (‘‘Consumer Bu- 1 reau’’), with broad authority to ensure that all hard- 2 working consumers are given clear, accurate infor- 3 mation that they need to shop for mortgages, credit 4 cards, and other consumer financial products or 5 services and to protect consumers from hidden fees, 6 abusive terms, and other unfair, deceptive, or abu- 7 sive acts or practices through strong implementation 8 and enforcement of Federal consumer financial laws. 9 (3) Before the Consumer Bureau was estab- 10 lished, Federal financial regulators were tasked with 11 the dual responsibilities of supervising institutions 12 for safety and soundness and compliance with con- 13 sumer protections under Federal consumer financial 14 laws. These agencies often prioritized the profit- 15 ability of their regulated entities over the protection 16 of consumers, even when institutions were found to 17 have engaged in practices detrimental to their own 18 customers’ financial well-being. 19 (4) Congress purposefully created the inde- 20 pendent Consumer Bureau within the Federal Re- 21 serve System to address past regulatory gaps in our 22 country’s financial regulatory regime—gaps that re- 23 sulted in the most severe global financial crisis since 24 the Great Depression. Among other things, Federal 25 VerDate Sep 11 2014 05:28 May 24, 2019 Jkt 034408 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1500.RFS H1500 pbinns on DSK79D2C42PROD with BILLS 4 HR 1500 RFS financial regulators were too reluctant to exercise 1 their rulemaking, supervisory, and enforcement au- 2 thorities to protect consumers from the misdeeds of 3 the Consumer Bureau’s regulated entities. In cre- 4 ating the Consumer Bureau, Congress explicitly laid 5 out in statute the Consumer Bureau’s purpose, five 6 objectives, and six primary functions. Specifically: 7 (A) Section 1021(a) of Dodd-Frank states 8 that the Consumer Bureau, ‘‘shall seek to im- 9 plement and, where applicable, enforce Federal 10 consumer financial law consistently for the pur- 11 pose of ensuring that all consumers have access 12 to markets for consumer financial products and 13 services and that markets for consumer finan- 14 cial products and services are fair, transparent, 15 and competitive’’. 16 (B) Section 1021(b) of Dodd-Frank au- 17 thorizes the Consumer Bureau, ‘‘to exercise its 18 authorities under Federal consumer financial 19 law for the purposes of ensuring that, with re- 20 spect to consumer financial products and serv- 21 ices—(1) consumers are provided with timely 22 and understandable information to make re- 23 sponsible decisions about financial transactions; 24 (2) consumers are protected from unfair, decep- 25 VerDate Sep 11 2014 05:28 May 24, 2019 Jkt 034408 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1500.RFS H1500 pbinns on DSK79D2C42PROD with BILLS 5 HR 1500 RFS tive, or abusive acts and practices and from dis- 1 crimination; (3) outdated, unnecessary, or un- 2 duly burdensome regulations are regularly iden- 3 tified and addressed in order to reduce unwar- 4 ranted regulatory burdens; (4) Federal con- 5 sumer financial law is enforced consistently, 6 without regard to the status of a person as a 7 depository institution, in order to promote fair 8 competition; and (5) markets for consumer fi- 9 nancial products and services operate trans- 10 parently and efficiently to facilitate access and 11 innovation.’’. 12 (C) Section 1021(c) of Dodd-Frank estab- 13 lishes the primary functions of the Consumer 14 Bureau to be, ‘‘(1) conducting financial edu- 15 cation programs; (2) collecting, investigating, 16 and responding to consumer complaints; (3) col- 17 lecting, researching, monitoring, and publishing 18 information relevant to the functioning of mar- 19 kets for consumer financial products and serv- 20 ices to identify risks to consumers and the 21 proper functioning of such markets; (4) subject 22 to sections 1024 through 1026, supervising cov- 23 ered persons for compliance with Federal con- 24 sumer financial law, and taking appropriate en- 25 VerDate Sep 11 2014 05:28 May 24, 2019 Jkt 034408 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1500.RFS H1500 pbinns on DSK79D2C42PROD with BILLS 6 HR 1500 RFS forcement action to address violations of Fed- 1 eral consumer financial law; (5) issuing rules, 2 orders, and guidance implementing Federal con- 3 sumer financial law; and (6) performing such 4 support activities as may be necessary or useful 5 to facilitate the other functions of the Bu- 6 reau.’’. 7 (5) In doing so, Congress explicitly laid out 8 these consumer-focused purpose, objectives, and pri- 9 mary functions for the Consumer Bureau to ensure 10 that all consumers and all communities are pro- 11 tected. This is of extreme importance to commu- 12 nities of color who have been disproportionately im- 13 pacted by the inequities of the financial system, re- 14 sulting in an extreme racial wealth divide. Decades 15 of segregation and discrimination have prevented 16 consumers of colors from amassing wealth equal to 17 their white counterparts, while predatory financial 18 practices of have stripped consumers of color of their 19 nominal existing wealth. For example, over the past 20 30 years, the average wealth of White families has 21 grown by 84 percent—1.2 times the rate of growth 22 for the Latino population and 3 times the rate of 23 growth for the Black population. In light of histor- 24 ical practices and current-day disparities in banking 25 VerDate Sep 11 2014 05:28 May 24, 2019 Jkt 034408 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1500.RFS H1500 pbinns on DSK79D2C42PROD with BILLS 7 HR 1500 RFS and lending practices, the Consumer Bureau plays a 1 key role in protecting communities of color from 2 wealth-stripping financial products and ensuring 3 their right to wealth building opportunities. The 4 agency’s enforcement actions in auto lending, mort- 5 gages, and credit cards, and its rulemaking efforts 6 have sought to address the predatory financial prod- 7 ucts such as payday loans and prepaid cards that 8 are prolific in communities of color. The Consumer 9 Bureau is essential in protecting vulnerable commu- 10 nities from discriminatory financial practices that 11 has both perpetuated and exacerbated the racial 12 wealth gap. 13 (6) Under Dodd-Frank, the Deputy Director of 14 the Consumer Bureau shall serve as the Acting Di- 15 rector in the absence or unavailability of the Direc- 16 tor, until the President appoints and the Senate con- 17 firms a new Director. Despite the plain letter of the 18 law establishing a succession order to fill a vacancy 19 in the Director’s position and the clear legislative 20 history underscoring the importance of having an 21 independent Federal consumer-focused agency, when 22 the Consumer Bureau Director Richard Cordray re- 23 signed in November 2017, President Trump refused 24 to recognize the Deputy Director as the rightful 25 VerDate Sep 11 2014 05:28 May 24, 2019 Jkt 034408 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1500.RFS H1500 pbinns on DSK79D2C42PROD with BILLS 8 HR 1500 RFS head of the agency and instead installed Mr. Mick 1 Mulvaney, the Director of the White House Office of 2 Management and Budget, to serve as the Consumer 3 Bureau’s Acting Director. This appointment of a 4 White House cabinet official to run the Consumer 5 Bureau raises profound conflict of interest questions 6 and undermines the vital independent nature of the 7 agency. 8 (7) Additionally, the position of Acting Director 9 is, by its nature, intended to be a temporary assign- 10 ment to maintain the status quo at an agency and 11 to ensure the agency is fulfilling its statutory pur- 12 pose and mandates, until the President appoints, 13 and the Senate confirms a permanent Director. Nev- 14 ertheless, during his tenure, Mr. Mulvaney instituted 15 drastic and severe changes to the Consumer Bu- 16 reau’s daily operations and priorities contrary to the 17 agency’s statutory purpose and mandates. 18 (8) The daily operations of a Federal agency 19 are guided by its official mission contained in its 20 long-term strategic plan. The Consumer Bureau’s 21 mission should embrace both the spirit and plain let- 22 ter of the law by fully recognizing the agency’s stat- 23 utory purpose, objectives, and functions. It is trou- 24 bling that the Consumer Bureau, under Mr. 25 VerDate Sep 11 2014 05:28 May 24, 2019 Jkt 034408 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1500.RFS H1500 pbinns on DSK79D2C42PROD with BILLS 9 HR 1500 RFS Mulvaney, issued a Strategic Plan for Fiscal Year 1 (‘‘FY’’) 2018–FY 2022 that appears to deemphasize 2 the Consumer Bureau’s core mandate under section 3 1021(a) of Dodd-Frank to, ‘‘enforce Federal con- 4 sumer financial law consistently for the purpose of 5 ensuring that all consumers have access to markets 6 for consumer financial products and services’’, by 7 not referencing the importance of enforcement in its 8 mission. Instead, it emphasizes financial education 9 by stating that the agency’s new mission is, ‘‘[t]o 10 regulate the offering and provision of consumer fi- 11 nancial products or services under the Federal con- 12 sumer financial laws and to educate and empower 13 consumers to make better informed financial deci- 14 sions’’. This is in stark contrast from the Consumer 15 Bureau’s Strategic Plan for FY 2013–FY 2017, 16 which stated that the agency’s mission is helping, 17 ‘‘consumer finance markets work by making rules 18 more effective, by consistently and fairly enforcing 19 those rules, and by empowering consumers to take 20 more control over their economic lives’’. 21 (9) Mr. Mulvaney has been praised by the 22 White House for his efforts to undermine the Con- 23 sumer Bureau, with one anonymous advisor ac- 24 knowledging in a July 24, 2018, Politico article that, 25 VerDate Sep 11 2014 05:28 May 24, 2019 Jkt 034408 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1500.RFS H1500 pbinns on DSK79D2C42PROD with BILLS 10 HR 1500 RFS ‘‘His mission was to blow that up, which he has. He 1 is very well-suited to the chaos.’’. Mr. Mulvaney’s 2 misguided actions have included, among other 3 things— 4 (A) stopping payments from the Civil Pen- 5 alty Fund to harmed consumers; 6 (B) trying to reduce the Consumer Bu- 7 reau’s funding and staffing by initially request- 8 ing $0 be transferred from the Federal Reserve 9 Board of Governors to carry out the agency’s 10 work, imposing a freeze on hiring professional 11 career staff, and by arbitrarily directing staff to 12 cut the agency’s budget by 1⁄5; 13 (C) politicizing the work of the Consumer 14 Bureau by making unusual efforts to fill the 15 independent agency with political appointees; 16 (D) reducing the Consumer Bureau’s en- 17 forcement work, including taking only six en- 18 forcement actions in the first three quarters of 19 2018 (compared with 54 enforcement actions 20 taken by the agency in 2015, 42 enforcement 21 actions in 2016 and 36 enforcement actions in 22 2017), and dropping existing lawsuits and in- 23 vestigations into predatory payday lenders; 24 VerDate Sep 11 2014 05:28 May 24, 2019 Jkt 034408 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1500.RFS H1500 pbinns on DSK79D2C42PROD with BILLS 11 HR 1500 RFS (E) taking steps that would undermine ef- 1 forts to promote fair lending and combat dis- 2 criminatory practices, including by hiring, and 3 later refusing to remove, a political appointee 4 with a history of racist written commentary to 5 oversee the Office of Supervision, Enforcement, 6 and Fair Lending, stripping away the enforce- 7 ment powers of the Office of Fair Lending and 8 Equal Opportunity, seeking to curb the Con- 9 sumer Bureau’s data collection under the Home 10 Mortgage Disclosure Act, and indicating the 11 Consumer Bureau would reconsider its ap- 12 proach toward enforcing the Equal Credit Op- 13 portunity Act; 14 (F) changing the role of the Office of Stu- 15 dents and Young Consumers and, according to 16 an August 27, 2018, resignation letter from 17 Seth Frotman, the Consumer Bureau’s former 18 Assistant Director and Student Loan Ombuds- 19 man, ‘‘when new evidence came to light showing 20 that the nation’s largest banks were ripping off 21 students on campuses across the country by 22 saddling them with legally du [Text truncated for display. 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