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Posts Tagged ‘committee hearing’

Chairman Hensarling at Hearing on CFPB

September 13th, 2013 Comments off

the-committee-on-financial-service.pngHouse Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at the full committee hearing on the Consumer Financial Protection Bureau’s (CFPB) semi-annual report with Director Richard Cordray.

“This morning we welcome Director Richard Cordray, Director of the CFPB, to deliver the bureau’s latest semi-annual report. Mr. Cordray, we recognize that the bureau’s latest semi-annual report may be a little bit dated due to the legal controversy that previously surrounded your appointment and thus delayed your timely appearance. Nonetheless we welcome you today and congratulate you on your recent Senate confirmation.

“As all of us know, the CFPB was designed to operate outside the usual system of checks and balances that applies to almost every other government agency.

“Number one, the CFPB is effectively unaccountable to Congress. It is exempted from the Congressional budgetary and appropriations process. Unlike many other agencies, there is thus no check to ensure the CFPB director is spending the people’s money effectively to promote consumer protection, much less effectively in a time of runaway debt and deficits. Not even the agency from which the CFPB obtains its funding, the Federal Reserve, has oversight over the CFPB director’s spending.

“The CFPB is unaccountable to the executive branch. The director, once appointed and confirmed, can only be removed by the president for cause. Neither can the nation’s chief executive enforce spending discipline on the Bureau because it is not subject to the Office of Management and Budget. Nor does CFPB have their own Inspector General.

“I also find it fascinating, as Syria has dominated our national consciousness, that it merely takes a majority vote of Congress to launch military action or to go to war, but it takes a super-majority vote of the Executive Branch Financial Stability Oversight Council to overturn a ruling of the CFPB, and then only if that ruling can be shown to threaten the safety and soundness of the entire U.S. financial system.

“Next, the CFPB is also uniquely unaccountable to the courts. Section 1022 of the Dodd-Frank Act provides that where the Bureau disagrees with any other agency about the meaning of a provision of a Federal consumer financial law, a reviewing court must give deference to the Bureau’s view under the Chevron Doctrine.

“Finally, in many respects, the CFPB is uniquely unaccountable even to itself since there is fundamentally no ‘it,’ no ‘they’ – only a he. There is no commission, only one omnipotent director, fundamentally accountable to no one.

“Combined with this breathtaking lack of accountability is a grant of power under Dodd-Frank to the CFPB Director that is unilateral, unbridled and unparalleled. The director can unilaterally declare virtually any financial product or service as ‘unfair,’ or ‘abusive,’ at which point Americans will be denied that product or service even if they need it, understand it and want it. Be he our credit czar, national nanny or benevolent financial product dictator, Mr. Richard Cordray is now empowered fundamentally to decide what types of credit cards Americans are allowed to have, what types of mortgages they may have, whether or not they can access a pay day lender.

“All of this does beg the question: who will protect consumers from the Consumer Financial Protection Bureau?

“True consumer protection requires access to competitive, transparent and innovative markets vigorously policed for force, fraud and deception. True consumer protection empowers consumers and respects their economic freedoms to make informed choices free from government interference and fiat.

“Consumer protection is not a zero-sum game – where for consumers to win producers must lose, or where borrowers can only win when lenders lose. Consumer Protection is not, having powerful government agencies ‘nudge’ consumers to make ‘correct’ choices in the belief they are incapable of making rational decisions for themselves.

“When it comes to true consumer protection, and when it comes to the Consumer Financial Protection Bureau, this committee will do everything we can to demand the highest levels of accountability, transparency and answers.”

Financial Services Committee Chair: Rein in FHA

March 14th, 2013 Comments off

HousingWire informs MHProNews Chairman of the House Financial Services Committee, Rep. Randy Neugebauer, (R-TX), during a committee hearing on the private mortgage insurance market, noted that the Federal Housing Administration (FHA) continues to risk taxpayer dollars. In regard to FHA and its Mutual Mortgage Insurance Fund, he says, “FHA does not evaluate its risk according to actuarial principles; it does not correlate premiums to risk; it does not spread its risk in a manner supported by its financial resources; and it relies on treating poor results as a quarantined anomaly.” While FHA’s $30 billion in reserves is considered adequate to cover potential losses, House Bill 1028 would eliminate putting taxpayers at risk should a bailout be necessary. Neugebauer says the FHA “should be a complement to the private market, not a direct competitor.”

(Image credit: Facebook)

Cordray Nomination on the Line

March 12th, 2013 Comments off

HousingWire reports during a Senate Banking Committee hearing concerning the nomination of Richard Cordray to head the Consumer Financial Protection Bureau (CFPB) for a second term, some committee members put Cordray on the hot seat. They grilled him about his operation of the agency and what would happen to the funds if his appointment is invalidated. Meanwhile, one panel member pointed out the CFPB received high marks from the banking industry for its handling of the the qualified mortgage (QM) rule. As MHProNews has learned, newly-elected Sen. Elizabeth Warren (D-Mass.), who set up the CFPB, told Cordray he has earned his nomination. Cordray was a recess appointment by President Obama, and did not originally receive Senate confirmation.

(Photo credit: ABC News–Richard Cordray)

Galante finally Approved to Lead FHA

January 2nd, 2013 Comments off

NationalMortgageNews reports over a year after the Senate Banking Committee voted to send Carol Galante’s confirmation to the full Senate as Commissioner of the Federal Housing Administration (FHA), the Senate voted 69-24 to confirm her appointment Sunday during a special session dealing with the fiscal cliff controversy. As MHProNews reported Dec. 14, 2011, Sen. Jim Demint, (R-SC), leveling charges at Ms. Galante of being short-sighted at a Senate Banking Committee hearing on her nomination, said, “We need people with a sense of urgency (italics added) about the need to turn things around and reduce our debt and avoid future bailouts.” Sen. Bob Corker (R-Tenn.), noting more needs to be done to repair FHA’s financially challenged single-family program, says as the confirmed commissioner Galante can now assemble her own staff and take more aggressive steps. The acting head of FHA since July 2011, she will also serve as a HUD assistant secretary.

(Photo credit: HUD GOV–Carol Galante)

MHI Responds to Unexpected Testimony at Congressional Hearing

February 8th, 2012 2 comments

MHProNews.com has received a memorandum from Joe Stegmayer, Chairman of the Manufactured Housing Institute (MHI), regarding testimony at last week’s House Financial Services Committee hearing on HUD’s implementation of the Manufactured Housing Improvement Act of 2000. Noting the difficulty in gaining the attention of Congress, Stegmayer emphasizes the extended effort expended by MHI staff and members to obtain this hearing, and the opportunity to introduce bipartisan legislation (H.R. 3849) aimed at the unintended consequences of the SAFE Act and Dodd-Frank that negatively impact MH. Several members of Congress did remark on the importance of manufactured housing as a source of affordable housing. MHI had been asked to recommend a witness who could attest to HUD’s implementation of the MH Improvement Act of 2000. Manuel Santana, Director of Engineering for Cavco and a member of HUD’s Manufactured Housing Consensus Committee (MHCC) was chosen for this role. His testimony included HUD’s slow response to changes in the industry, and ineffectiveness in implementing regulatory directives contained in the Improvement Act. Another witness chosen by congressional staffers to testify was Ishbel Dickens, Executive Director, Manufactured Homeowners Association of America (MHOAA), also a member of MHCC. Ms. Dickens opted to use her testimony to lash out at MHC owners instead of the task outlined by the committee. In response, MHI/NCC (National Communities Council) will compose a letter to the House committee documenting positive attributes of community living while responding to the issues raised by Ms. Dickens. In addition, MHI/NCC will seek an opportunity for NCC to have a discussion with House committee members, and for an NCC representative to testify before the House Financial Services Committee.

(Graphic credit: U.S. House of Representatives)