November 12, 2013


WASHINGTON – U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Banking, Housing and Urban Affairs Committee, today delivered the following remarks during a Banking Committee hearing on the Consumer Financial Protection Bureau’s semi-annual report to Congress:
"Thank you, Mr. Chairman.
"Today we will hear from Director Cordray on the Consumer Financial Protection Bureau (CFPB) Semi-Annual Report.  This hearing provides an opportunity to discuss the future of the agency and evaluate its past performance. 
"Thank you, Director Cordray, for two recent actions the agency has taken.  Back in the spring, it was brought to our attention that the presence of enforcement attorneys attending onsite supervisory examinations was negatively affecting the process. 
"Very recently, the Bureau announced a decision to remove the enforcement attorneys from examinations, which will now allow a free exchange of information between banks and their examiners ultimately resulting in better supervision.
"In addition, at a September House hearing, the Director noted that the annual privacy notice requirement under Gramm Leach Bliley may be placing unnecessary burden on institutions without much benefit to consumers.  Senators Brown and Moran have a bill pending in the Senate, and I hope we can move it across the finish line soon.  These actions were a move in the right direction and I appreciate Director Cordray taking them.
"Consumer protection is vital for a properly functioning financial market place.  We are now three years removed from the creation of the Bureau, and while some growing pains have been expected, it is time for the Bureau to be viewed and treated as a seasoned regulator.
"As part of our oversight role, we expect all of our banking regulators to operate efficiently, demonstrate transparency and act responsibly.  While I appreciate the positive steps the Bureau has taken in recent months, it has also taken several actions that have been widely criticized, calling into question efforts to meet those expectations.
"Earlier this year, the Bureau issued a bulletin on indirect auto lending that represents a major shift in policy.  However, there was no public input prior to this change being made.  This particular policy shift could ultimately increase the cost of credit and reduce options for financing when an individual goes to buy a car or truck.  A bipartisan group of Senators sent a letter to the Bureau last week highlighting these concerns.
"The CFPB has also become a very active agency in other areas.  With this increased activity, the Bureau has the responsibility to prevent potential regulatory burden and overreach, especially as it begins to supervise new markets and products. 
"Small institutions, like those in Idaho, are being significantly affected by the sheer volume of new CFPB regulations they are forced to comply with, as well as the constantly changing regulatory scheme.  Some simply do not have the resources to meet these new regulatory demands.
"In previous hearings, I have raised my concerns of the Bureau’s Big Data collection of consumer financial information.  Examples of personal privacy failures by our federal agencies have only increased since that time.  
"Just last week, it was announced that the Internal Revenue Service (IRS) was complacent in a huge identity theft scheme that left 1.6 million American taxpayers vulnerable.  Identity theft is just one harmful consequence of irresponsible data collection.
"With regard to the CFPB’s data collection efforts, basic questions are still unanswered: how many credit card accounts is the Bureau following on a monthly basis and who at the agency holds the keys to view and use the date? The Bureau’s lack of a clearly identifiable and articulated purpose for the data collection is troubling.
"For these reasons, I requested that the Government Accountability Office investigate the CFPB’s data collection to determine its purpose, scope, intended use and specific legal authority.
"Data collection touches every aspect of the Bureau’s activities.  As a result, this Committee needs a clear and complete understanding of the process.
"Thank you, Mr. Chairman."