Dear Community Bank CEO:
Today, the House Financial Services Committee (HFSC) is considering H.R. 3126, the Consumer Financial Protection Agency Act (CFPA). We expect the HFSC to pass the CFPA Act and send the bill to the House floor for debate. Sometime today or tomorrow Rep. Brad Miller (D-NC), and co-author Dennis Moore (D-Kansas), members of the committee, will offer an amendment that will provide significant relief to all community banks with assets under $10 billion dollars. If adopted, the Miller amendment, together with the Manager’s amendment, will address many of ICBA’s key concerns with the bill as they relate to the examination, enforcement and authority of the CFPA.
Three of the key features of the Miller amendment that will provide relief from the CFPA for community banks are:
- Primary authority for routine and special examinations (both compliance and safety and soundness) will remain with the banking agencies (not the CFPA) for all banks under $10 billion in assets.
- The CFPA will have no authority to assess fees against any bank with assets under $10 billion for purposes of funding the agency.
- Your current bank regulator will have primary authority to enforce violations of consumer laws (not the CFPA).
In addition to the provisions of the Miller amendment, ICBA was successful early on in removing CRA examination authority from the CFPA. It remains with the traditional banking agencies. Further, earlier provisions calling for “plain vanilla products” and a “reasonableness test” have been dropped.
ICBA pushed to exempt the Federal Home Loan Banks from CFPA jurisdiction. I am pleased to report that our efforts were successful in this regard; the Manager’s amendment does exempt the FHLB system from CFPA jurisdiction. The Manager’s amendment also significantly narrows the circumstances under which the CFPA can assert jurisdiction over your bank accountants.
There are other features of both the Miller amendment and the Manager’s amendment that will bring additional relief. I have only touched on the highlights.
While the bill is much improved over the original act, ICBA still has several concerns that need to be addressed and corrected. We will continue to work with both the House and Senate to make additional improvements in the bill that will benefit the community banking industry.
The CFPA issue is still in its early stages. A long legislative road still lies ahead for this measure. I am sure there will be many twists and turns along the way, but at least for today, thanks to the yeoman efforts of thousands of our member banks, ICBA and the community banking industry has made good progress.