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ICBA Policy Resolutions for 2010
ICBA Priorities for 2010
FAIR AND EQUITABLE CONSUMER PROTECTION LAWS Position - ICBA strongly opposes the creation of a Consumer Financial Protection Agency (CFPA) or any new independent federal agency to regulate financial products and services and enforce consumer financial protection laws.
- ICBA opposes separating consumer policy and enforcement from safety and soundness enforcement because it could give rise to conflicts of interest and be counter-productive to a balanced regulatory system. Examination and enforcement of consumer protection laws should remain with a bank’s primary regulator.
- ICBA believes that all financial firms that grant credit should comply with the same consumer compliance laws that apply to community banks, and the focus of any enhanced regulation of consumer financial products should be on the unregulated “shadow” financial industry.
Background Community banks pride themselves on the safety and soundness of the loans they make, and their customers benefit from the reliable and sensible treatment they receive. Highly regulated community banks always put their customers first. The best way to protect consumers is to put an end to “too-big-to-fail” policies that have already cost American consumers more than $10 trillion through the collapse of the housing and stock markets, and sapped their net worth. ICBA strongly opposes the proposal to create a new federal agency to enforce and regulate consumer financial products and services. Such an agency would separate consumer policy and enforcement from safety and soundness enforcement, when all of these elements must co-exist and be balanced for effective financial services regulation and enforcement. Bank regulators have the expertise in balancing the safe and sound operation with the need to provide consumers information they need to make informed financial decisions and protect them from unfair and harmful practices. Any enhanced consumer protection laws should focus on the unregulated “shadow” financial industry which has victimized consumers the most while avoiding serious regulatory scrutiny. This segment of the financial services industry was most responsible for the near collapse of the U.S. economy and should be brought under the same regulatory umbrella as commercial banks. ICBA supports a balanced regulatory system in which all financial firms that grant credit comply with the same consumer compliance laws. Community banks should not be burdened with new consumer protection laws while the unregulated financial firms get a pass. Community banks are already required to spend significant resources complying with voluminous consumer protection statutes. Any further regulations enacted by Congress should not add to these significant costs, and examination and enforcement, as well as CRA, should remain with their primary prudential regulators. Staff Contacts: Jason Kratovil, Ron Ence Return to ICBA Policy Resolutions
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