Bill Introduced To Rein In CFPB Authority Under Consumer Protection Law

WASHINGTON–A bill to ensure the CFPB does not expand its authority under the Consumer Financial Protection Act has been introduced by Senate Banking Committee Chairman Tim Scott (R-SC) and Rep. Bryan Steil (R-WI).

Tim Scott

The Business of Insurance Regulatory Reform Act (S. 2419/H.R. 4735) would amend the Consumer Financial Protection Act to revise the authority of the CFPB over activities regulated by a state insurance regulator, exempting the business of insurance from CFPB oversight, explained America’s Credit Unions.

America’s Credit Unions President/CEO Jim Nussle wrote in support of the bill, noting it would “provide needed clarity to ensure that states’ rights to regulate insurance are explicit” and is necessary “because despite the CFPB exemption, there have been certain instances where the CFPB has seemingly overstepped its jurisdictional authority, which would create immense uncertainty.”

“We appreciate Chairman Tim Scott’s leadership in working to clearly define the boundaries of the Consumer Financial Protection Bureau’s authority as it relates to the business of insurance,” said Dan Schline, president/CEO of the Carolinas Credit Union League. “On behalf of credit unions across the Carolinas and the nearly seven million members they serve, we thank Chairman Scott for his continued commitment to this important issue.”

“We appreciate the opportunity to share our continued support for these proposed revisions. They would have a positive impact on Wisconsin’s credit unions and the 3.9 million Wisconsinites that trust them as their financial partner,” said Sarah Wainscott, president/CEO of the Wisconsin Credit Union League. “TruStage, a mutual insurance holding company and vital credit union system partner, serves 94% of credit unions nationwide. Their ability to serve credit unions effectively and efficiently in Wisconsin and throughout our country is critical.”

The Defense Credit Union wrote to Scott in support of the bill, stating: “We share your concern that any attempt by the CFPB to expand its reach into insurance regulation would exceed its scope and could impose significant burdens on community-based, member-owned institutions. Credit unions are not-for-profit cooperatives dedicated to serving their members, and they already operate under a multitude of regulations designed to protect consumers and ensure sound operation. Introducing a new federal regulatory layer for insurance activities — when those activities are already thoroughly regulated at the state level — would divert resources from member services and muddle the clear regulatory framework that consumers and providers have relied on for decades.”