November 12, 2013

JOHNSON ON CFPB’S SEMI-ANNUAL REPORT TO CONGRESS

WASHINGTON – Today, Senate Banking Committee Chairman Tim Johnson (D-SD) held a hearing titled “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.”

Below is Chairman Johnson’s statement as prepared for delivery:

“I call this hearing to order.

“Director Cordray, welcome back to the committee and congratulations on your Senate confirmation. We are here today to continue our regular oversight of the CFPB, giving this Committee another opportunity to review the important work of the agency to protect consumers and empower them to make responsible financial decisions, promote fair competition, and enable access to financial services for all Americans.

“The CFPB has made good progress in fulfilling its mission. The Bureau has undertaken critical analysis of the most common financial products in a consumer’s life, including mortgages, student loans, credit cards, and deposit accounts, and has taken actions to improve the consumer experience with these products. For example, for student loans, the Bureau has focused on key elements through its Paying for College Project, which streamlines the college financing process through extensive outreach to lenders, students, and educators.

“The CFPB has also proven to be a strong enforcer of consumer laws and has shown a no-tolerance policy for violators. Since the CFPB opened just two years ago, it has obtained $750 million of refunds for harmed consumers.

“This careful analysis and strong enforcement would not be possible without the Bureau’s ability to collect data. The CFPB is the first Federal agency to look at financial products and companies that had no supervision – and about which nobody had adequate information. All of the other federal financial agencies collect data to inform their supervision of the marketplace. The Federal Reserve, OCC, and FDIC understand, as does the CFPB, that smart regulation needs smart data. While we live in a world where more and more data about consumers is used by business and government alike, information security and data privacy must be safeguarded, and I am encouraged by the Bureau’s efforts to address these issues.

“Earlier this year, the CFPB finalized rules to strengthen mortgage standards, including rules on QM and servicing. These rules were well-received by consumer and industry groups. However, I remain interested in hearing from Director Cordray on how these rules will impact rural lending. With the effective date just a couple months away, I look forward to hearing your expectations for compliance with these rules in January, especially for small lenders.

“Finally, the Committee’s exploration of housing finance reform is well underway. As we move forward, I am interested to hear your thoughts on the interaction of your mortgage rules, including QM, with a new system, and any conflicts or unintended consequences for the primary and secondary mortgage markets.”

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