April 23, 2013


WASHINGTON – U.S. Senator Mike Crapo (R-ID), Ranking Member of the Senate Banking, Housing and Urban Affairs Committee, today delivered the following remarks during a Senate Banking Committee hearing in which the Consumer Financial Protection Bureau (CFPB) delivered its semi-annual report to Congress:
"Mr. Chairman, the semi-annual briefing by the Consumer Financial Protection Bureau is very important for us to gain insight into what the agency is doing.
"As I have consistently stated in past hearings, we still have concerns with the structural nature of the agency.
"We continue to seek a change from the sole Directorship to a Board-like structure.  It also is essential that the agency be part of the appropriations process. 
"And finally, we believe that the prudential banking regulators should have a formal input into the Bureau’s action where those actions affect safety and soundness.
"With regard to the President’s recess appointment to the CFPB last year, my opinion has not changed.  I continue to believe that the recess appointment was unconstitutional. 
"Recently, agency officials have pointed out that they have testified more than 30 times before Congress over the past few years. 
"While this gives Congress an opportunity to hear directly from agency officials, it really fails to facilitate an in-depth discussion of specific issues or concerns.
"Just last week, Bloomberg ran a lengthy article citing that the CFPB has allocated more than $20 million for collecting and tracking customer credit card and spending habits for more than 10 million Americans.
"The size of this data collection and the amount of money being spent by the agency are a cause of concern for me, and should be for those Americans whose credit card, checking account and other financial data are being sent monthly to the CFPB.
"Last month, I specifically asked the agency about this data collection, but the responses I received downplayed the nature and extent of the issue. 
"For example, I asked how many consumer accounts the CFPB is monitoring, and the agency declined to provide that information.
"Now we learn from the press that it is 10 million accounts, perhaps even more.
"This lack of candor and transparency of what the agency is doing and how it intends to use this personal financial data is troubling.
"The Bureau was founded with a mission to watch out for American consumers, not to watch them.
"Given that CFPB’s Inspector General has already identified data security issues at the Bureau, how can consumers be assured that their information is indeed safe?
"With regard to its regulatory role, in the past two years the Bureau has issued numerous new rulemakings resulting in a significant cumulative burden for affected institutions, especially small and community banks that often have only a handful of employees.
"In January alone, the Bureau finalized over 2,500 pages of new rules relating to mortgages through seven different rulemakings. 
"I am concerned that without strong cost-benefit analysis and input from the small business panels in crafting rules, even well intentioned rules could make consumer credit more expensive and less affordable.  
"That is why at two separate hearings last year I encouraged you to conduct a small business panel on the proposed Qualified Mortgage (QM) proposal to try to minimize unintended consequences.
"Many community bankers now warn that, despite limited QM exemptions for smaller institutions, they will no longer offer any mortgages outside the QM criteria which will restrict their ability to meet the mortgage needs of communities they serve.
"Another issue concerning the agency has been identified by the agency’s own Ombudsman who recommended the CFPB needed to review and clarify the role of enforcement attorneys who attend supervisory exams. 
"I look forward to hearing from you, Mr. Cordray, about how you plan to address the community bank concerns with the QM rule and how the CFPB is implementing the overall Ombudsman’s recommendations.
"Specifically, I would like to hear how the Bureau is handling the examination concern raised by the Ombudsman, as well as whether the Bureau is concerned about the effect the sheer presence of enforcement attorneys may have on the integrity of the examination process.
"I firmly believe that if the structure of the agency were changed then it would become more open and transparent and many of these issues would not need to be raised by members of Congress.
"It is my hope that Congress will move quickly to address and pass these reforms so that the Bureau can do what it was designed to do—protect American consumers. 
"Thank you, Mr. Chairman."