Comprehensive Regulatory Review Act

Floor Speech

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Mr. LOUDERMILK. Mr. Speaker, I want to thank my colleague from the Republic of Texas, Chairman Hensarling, for giving me this time to move away some of the hyperbole that you may hear today and speak about the truth of what this really simple and commonsense measure really does.

Mr. Speaker, the Comprehensive Regulatory Review Act is a bill that I introduced simply to reduce the burden that outdated and unnecessary Federal regulations place on our small banks and lending institutions across the landscape of America.

I would like to start by thanking some of my colleagues on both sides of the aisle who have worked tirelessly to make this a strong, bipartisan piece of legislation. I appreciate the gentleman from New Jersey (Mr. Gottheimer) for negotiating reasonable changes to this bill and for being an original cosponsor. I also appreciate Mr. Duffy and Ms. Sinema and the others who have reached across the aisle to cosponsor this important piece of legislation.

To fully understand this bill, Mr. Speaker, we have to go back to 1996, when Congress gave the financial regulatory agencies a useful tool by passing the Economic Growth and Regulatory Paperwork Reduction Act, or, as you have heard today, more commonly known as EGRPRA. This law directed the Office of the Comptroller of the Currency, the Federal Reserve, and the FDIC to review their regulations once every 10 years to identify those regulations that may be outdated, unnecessary, or overly burdensome. After that, the regulators were to send a report to Congress and eliminate any regulations they determined were unnecessary.

This law has been somewhat useful, and it was a good idea back in 1996 because, after all, who would be opposed to eliminating rules that even regulators thought were unnecessary? But too often, EGRPRA has been viewed as merely a check-the-box exercise by the agencies and the financial sector.

Now that we have two EGRPRA reports, a 2007 and a 2017, it is obvious that EGRPRA could have been more effective and produced more useful recommendations to policymakers. In retrospect, we also realize we need more direct action from the regulators to clean up outdated and unnecessary rules. That is why it is important for Congress to revisit EGRPRA, as this bill does.

My bill contains several reforms to the EGRPRA review process that will breathe new life into this law, this tool for the regulators, and make sure it is not simply a check-the-box exercise.

This bill will require more frequent regulatory reviews by moving the review cycle from once a decade to once every 7 years. It will expand EGRPRA to include all regulated financial institutions instead of only depository-insured institutions. It will codify the National Credit Union Administration into EGRPRA, since the agency participated in the latest review voluntarily.

The bill will also add the controversial Consumer Finance Protection Bureau, CFPB, to the EGRPRA review process. This provision is especially important because, before Dodd-Frank, consumer financial laws were implemented by the three banking agencies; but when Dodd- Frank was enacted, the CFPB was given the responsibility for enforcing consumer financial laws. Since the CFPB is exempt from EGRPRA, these laws and regulations are no longer being comprehensively reviewed.

Dodd-Frank requires the CFPB to review its regulations every 5 years after they are enacted, but this leaves out rules which are considered nonsignificant. It also excludes rules that were adopted before the CFPB was created. Also, the CFBP's regulatory reviews are under a single, 5-year look-back period.

We must ensure that each regulatory agency is comprehensively reviewing its rules, and on a regular basis.

This bill is not duplicative because it requires CFPB to use its findings from its existing regulatory reviews in its EGRPRA reports so the CFPB does not waste time on rules it has already reviewed. And, most importantly, Mr. Speaker, this bill will require the agencies to tailor rules that they find to be unnecessary based on the size and risk profile of the bank or the credit union.

Mr. Speaker, I would like to repeat that last point because it is so important. This bill does not require the agencies to cut regulations with a broad brush, as it has been presented so far, nor does it cut regulations on the payday lending industry, as some have argued. It simply states the rules will be adjusted based on a company's risk if the regulators determine that to be appropriate.

The bill ensures that if the financial regulators--the regulators-- determine that a regulation is important to consumer protection for safety and soundness, the agency will still have every right to leave that regulation completely intact.

This bill is not just about eliminating unnecessary regulations; it is about good government and cleaning up unnecessary red tape that inevitably hurts the consumer.

Mr. Speaker, the Treasury Secretary came to our committee for a hearing last month, and I asked him about this very issue. He simply said:

Rules and regulations need to be constantly looked at as markets continually change.

He also said:

I'm not sure why the CFPB was exempted from EGRPRA, so I agree with the change.

Mr. Speaker, this bill passed out of committee with a strong bipartisan vote of more than two-thirds of the committee members, and I urge my colleagues to join us in support of this bill.

Ms. MAXINE WATERS of California.

Mr. Speaker, I knew that my friends on the opposite side of the aisle would basically refer to small banks.

This is what is normally done when we see deregulatory efforts being made. They talk about how they are trying to help small and community banks, and they fail to talk about the major financial institutions that I have talked about in my presentation that are the beneficiaries, also, of this deregulatory effort that is being put forth.

When I take a look at the existing law now and the Economic Growth and Regulatory Paperwork Reduction Act, I see that their mission is to conduct a review of their regulations to identify outdated or otherwise unnecessary regulatory requirements imposed on insured depository institutions.

This deregulatory bill that we have before us goes a lot further. As I said, it is about deregulation, and it is about reducing cost and liability risk. This does not benefit our consumers at all.

Again, what we would do in the passage of this bill is simply open up opportunities for the big banks and financial institutions to get rid of the kind of oversight, the kind of laws that we have worked so hard for because it is inconvenient for them or it interferes with their bottom line in some way.

So I do not want our Members to be tricked or fooled to think, number one, this is simply about further getting rid of paperwork or that this is about supporting the small banks. This is about new ways by which to deregulate so that the big banks that are now found to be defrauding, found to be discriminating, found to be doing things like Wells Fargo has done, this is about deregulation that will further enhance their ability to do the kinds of things that we claim to be so opposed to and that harm our consumers.

The Consumer Financial Protection Bureau that they are now including by way of H.R. 4607 should be looked at very carefully.

First of all, my friends on the opposite side of the aisle hate the Consumer Financial Protection Bureau. They want to get rid of it. They have tried, time and time again, to undermine it in so many ways. The President has sent Mr. Mulvaney over there, who is supposed to be over at the Office of Management and Budget, to basically destroy it.

Mr. Speaker, we cannot allow the Members of Congress to be tricked or fooled that somehow this is helpful that they are bringing in the Consumer Financial Protection Bureau. What they want to do is tie the hands of the Consumer Financial Protection Bureau and basically change their mission from protection for consumers to deregulation for the biggest banks in America.

Why do we have the Consumer Financial Protection Bureau? That is the centerpiece of the Dodd-Frank reform legislation that we worked so hard on.

Are we forgetting about what happened in 2008?

Are with forgetting about the recession that was caused by the big banks who had been involved with all of these exotic products and ways by which they were enticing would-be homeowners to try and get mortgages?

We can't forget about all of that. We have to know that not only did we have a recession, we were headed for a depression. Dodd-Frank reform has gone a long way toward eliminating some of the bad practices that were in place that got us into that situation in the first place.

Now, little by little, my friends on the opposite side of the aisle keep trying to creep in with new ways that they can support these big banks and financial institutions and deregulate and let them get in the position again where they are tricking our consumers, where they are coming up with these exotic products that caused our consumers to eventually get into foreclosure, and that would allow the big banks again, like Wells Fargo, to come up with all of these tricks that they use in order to enhance their bottom line. I think we are smarter than this, and I don't think that we are going to go for this legislation that is just another way to open the doors to deregulate.

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