Why Is Sen. Baldwin Undermining Obama’s Consumer Financial Protection Bureau?
Baldwin is Co-Sponsoring Legislation with Senators Who Have Sought CFPB’s Destruction at Every Turn – Bill Helps Financial Predators Avoid Accountability
WASHINGTON, D.C. – Today, consumer watchdog organization Allied Progress called Sen. Tammy Baldwin (D-WI) out for co-sponsoring legislation with Republican Senators who have sought to defang and destroy the Consumer Financial Protection Bureau (CFPB). Their bill would make it far easier for financial predators to avoid accountability.
The CFPB’s regulatory authority over “the business of insurance” is limited, however there “are numerous products and activities that span the insurance/credit divide” and fall within the bureau’s purview, such as “credit insurance sold with loans, title insurance sold with home mortgages, [and] auto GAP insurance.”
Baldwin’s legislation would prohibit the CFPB from holding companies like this accountable when they steal from and otherwise abuse consumers.
“This is extremely disappointing. Sen. Baldwin has always been a champion of consumers and the Consumer Financial Protection Bureau but her new legislation would be a major blow to the CFPB’s authority to hold bad financial actors accountable and protect consumers from being ripped off,” said Karl Frisch, executive director of Allied Progress.
He continued, “If this bill becomes law, every predatory financial industry in the country will race to begin offering some sort of insurance product in order to block the CFPB from being able to hold them accountable and seek justice for consumers they’ve screwed over with all of their other products. I honestly don’t know what’s motivating the Senator.”
As recently as the fourth quarter of 2017, Northwestern Mutual, a Wisconsin-based company, has lobbied Congress on the “insurance exclusion from CFPB jurisdiction.”
WHAT YOU NEED TO KNOW:
- In April 2018, Sen. Tammy Baldwin (D-WI) co-sponsored legislation to “revise the 2010 Dodd-Frank law” and “prevent the Consumer Financial Protection Bureau from regulating insurance.” On April 18, 2018, Sen. Tammy Baldwin (D-WI) co-sponsored S.2702 entitled “A bill to amend the Consumer Financial Protection Act of 2010 to clarify the authority of the Bureau of Consumer Financial Protection with respect to persons regulated by a State insurance regulator, and for other purposes” with Sens. Tim Scott (R-SC), Mike Rounds (R-SD), and Joe Manchin (D-WV). [“S.2702,” United States Senate, 04/18/18; Katy O’Donnell, “New bipartisan bill would curtail CFPB’s authority over insurance,” Politico Pro, 04/19/18]
- Northwestern Mutual, a Wisconsin-based company, has lobbied Congress on “insurance exclusion from CFPB jurisdiction” as recently as the fourth quarter of 2017. In the fourth quarter of 2017, Northwestern Mutual Life Insurance Company of Milwaukee, WI, reported spending $940,000 on lobbyists. Their efforts specifically included “Insurance exclusion from CFPB jurisdiction.” [“2017 Q4 Lobbying Report for Northwestern Mutual,” Senate Lobbying Database, accessed 04/19/18]
- Although Dodd-Frank limits the CFPB’s regulatory authority over “the business of insurance,” there “are numerous products and activities that span the insurance/credit divide” and fall within the bureau’s purview, such as “credit insurance sold with loans, title insurance sold with home mortgages, [and] auto GAP insurance.” [“Testimony of Dr. Marcus Stanley,” Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee, 12/07/17; “Letter to Rep. Sean Duffy,” Allied Progress, et al, 12/18/17; Testimony of Anthony Cimino, U.S. House Financial Services Subcommittee on Financial Institutions and Consumer Credit, 12/07/17]
- Baldwin co-sponsor Sen. Tim Scott (R-SC) also co-sponsored a bill that would allow Congress to “drastically limit the scope and size of the” CFPB. The bill did this by taking its funding from the independent Federal Reserve and placing the agency “under the congressional appropriations process.” This legislation was being pushed by many of the key financial industry groups, including the American Bankers Association, the Taxpayers Protection Alliance and the Credit Union National Association. [S. 387, Congress.gov, 02/15/17, and Sylvan Lane, “GOP senators unveil bill to give Congress control of consumer bureau budget,” The Hill, 02/15/17]
- Baldwin co-sponsor Sen. Mike Rounds (R-SD) also introduced legislation in 2017 “to dismantle the Consumer Financial Protection Bureau” which he referred to as “an unaccountable regulatory agency ran by unelected bureaucrats with no oversight from Congress.” In February 2017, Sen. Mike Rounds “introduced legislation to dismantle the Consumer Financial Protection Bureau (CFPB) by eliminating its funding stream from the Federal Reserve.” Rounds described the CFPB as “‘an unaccountable regulatory agency ran by unelected bureaucrats with no oversight from Congress.’” [Press Release, “Rounds Introduces Legislation to Dismantle CFPB,” Office of Senator Mike Rounds, 02/14/17]
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