U.S. Chamber Statement on Financial Regulatory Reform
By US Chamber of Commerce
WASHINGTON, D.C.-U.S. Chamber of Commerce Executive Vice President Bruce Josten today responded to remarks by Deputy Treasury Secretary Neal Wolin that politicized the debate on financial regulatory reform and distorted the facts. “The U.S. Chamber is committed to a bipartisan effort to modernize and strengthen our broken regulatory system, restore investor confidence, and get Main Street America back to work,” said Josten. “Despite the political grandstanding and distortion of facts today by Secretary Wolin, the U.S. Chamber of Commerce is in lockstep agreement with the Deputy Secretary on one point: facts do matter.”
According to the Chamber,
1. Fiction: The Deputy Secretary suggested that Chamber efforts were “not designed to improve” the financial overhaul bills.
Fact: The Chamber has made every effort to be a constructive participant in the discussions, including in December of 2009 when we offered a proposal for creating a Consumer Protection Council to ensure coordination of regulatory and enforcement actions among the federal financial regulators. Without creating a massive new bureaucracy, this Council would ensure that regulatory gaps are eliminated, prescribe consistent disclosure and examination standards, and identify areas in which new regulations are necessary.
2. Fiction: The Secretary erroneously stated that the House bill’s language would not dictate and require “plain vanilla” products.
Fact: An explicit “plain vanilla” provision was included in the original House bill, and was dropped in name only from subsequent legislation. However, the broad rule-writing authority coupled with vague regulatory standards would continue to give the new regulator the ability to steer the market towards standardization and “plain vanilla” products. The effect therefore on consumers, small businesses, and small financial institutions will be the same – less competition, a reduction in the availability of and choice among credit products, and disadvantages for smaller financial institutions.
3. Fiction: On the bill’s scope, Wolin wrongfully stated that the Chamber falsely claims that the new agency would have authority to “extend far beyond traditional financial services products to a vast majority of the economy.”
Fact: The Consumer Financial Protection Agency’s unprecedented authority does not stop at banks and other providers of financial products. For example, if you are a merchant, retailer or nonfinancial provider of goods and services that extends credit and the credit is 1.) subject to a finance charge, or 2.) payable in more than 4 installments, you can be subject to the CFPA. (See Dodd Bill: Section 1027(a)(2)(B)(iii)).
“The facts are the facts,” Josten said. “The draft Senate bill will give the CFPA very broad and unchecked government authority to write its own rules without oversight by Congress, the President, or the Federal Reserve. It will give unelected federal bureaucrats unprecedented power over Main Street businesses, dictating financial products for a broad swatch of Americans. Our goal is to achieve financial regulatory reform that provides clear consumer protections and a 21st century system that will allow businesses to create jobs and strengthen our economy.”
Bloomberg released a poll today that confirms the Chamber’s concerns about a “new, separate agency with complete independence and its own authority to make rules for consumer credit,” with nearly 7 in 10 Americans preferring enhancements to the existing system over the creation of a separate, new agency.
Since its inception three years ago, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems that have governed our capital markets. The CCMC is committed to working aggressively with the administration, Congress, and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.
# # #