Sen. Richard Shelby (R-Ala.) criticized the CFPB’s use of enforcement actions to set market standards rather than a rule-making process, its perceived lack of accountability, and many aspects of the Dodd-Frank Act itself.
“Unfortunately, the drafters of Dodd-Frank immunized the Bureau from any meaningful congressional influence, leaving it free to engage in questionable practices and unreasonable expansions of its jurisdiction,” Shelby said. ““The only effective restraint available now resides in the courts. Fortunately, this week a federal court of appeals has directed the CFPB to defend the constitutionality of its structure.”
Shelby said the CFPB’s actions have actually undermined its mission.
“There is now growing concern that, despite the Bureau’s mission, its rules and regulations actually restrict access to credit, increase costs, and deny financial products to the consumers who need them,” he said. “Last year’s survey by the Federal Reserve found that 47% of U.S. households are unable to come up with $400 in emergency funds without selling something, going into credit card debt, or using a short-term loan.
“By targeting some of these products in its rulemakings, the Bureau may be blocking access to the very financial services many Americans may need in a crisis,” Shelby added. “Consumer protection should not mean limiting consumers’ options by substituting the Bureau’s judgment for the consumers’.”
The chair of the Senate Banking Committee had harsh words for the director of the Consumer Financial Protection Bureau at a hearing Thursday.