Featured speakers were Ryan McKee, senior director of the USCC, and Jason Matthews, director of congressional affairs of the USCC.
McKee offered an overview of the proposed CFPA, which would vastly regulate a large portion of the business community. This includes any business that provides flexible payment options to customers and any company that provides service to financial institutions, such as settlement service providers and title insurance.
"Bottom line, no matter where you are in the chain, even if you have no direct interaction with the consumer, you would be regulated by the new agency," McKee said.
Click here for more on the CFPA, such as a list of town hall meetings on the CFPA, ALTA's one-pager explaining the proposed agency, and the proposed powers the agency could wield.
Primary supervision and enforcement authority over the consumer financial protection functions currently performed by the federal bank regulatory agencies and the Federal Trade Commission (the "FTC") would be transferred to the CFPA, including exclusive authority over all related research, rulemaking, guidance, supervision, examination and enforcement activities. Accompanying this transfer of authority would be the transfer of exclusive rulemaking and examination authority to the CFPA for the consumer protection provisions in at least 16 existing federal consumer protection laws, including the Real Estate Settlement Procedures Act ("RESPA") and the Truth-In-Lending Act ("TILA").
McKee explained that the agency could issue any new regulations regarding the types of services that can be offered and also would have the authority to conduct costly examinations of businesses to verify compliance. She said the CFPA also could require standardized reports from businesses, including title agents, at any time. This would require new technology to produce the reports.
"If approved as written, the federal government will tell consumer what they can buy and will tell businesses what products they can offer," McKee said. "Complying with the CFPA would impose new costs on any company involved with consumer finance transactions and these costs will be passed on to the consumer. There will be restricted access to credit at a higher price."
Fees also will be levied on small businesses and title agents to fund the agency. McKee said the CFPA would be able to decide who pays what without any congressional review.
"In effect, it can decide what its expenses are and how bit it wants to be," she said. "There's no guidance in the current language on who pays what."
The USCC has commissioned a study to see what impact the fees will have on small businesses, McKee said.
After McKee summarized the CFPA's potential impact, Matthews provides a view from what's shaping up on Capitol Hill.
"I am seeing that they intend to sweep up the entire industry and create a regime that is breathtaking," Matthews said.
Once Congress returns from its summer break Matthews expects action on the CFPA to speed up. He said Sept. 23 is the target date for the House Financial Services Committee to take action, and expects some modified version of the bill to be sent to the Senate.
"Fundamentally, we are opposed to a standalone agency; we are working to make improvements where we can in the House to get the most problematic provisions removed," Matthews said. "Then work with Senate to continue massaging the bill."
He said he had a series of meetings with Democrats and Blue Dogs that have expressed some level of discomfort with the proposal.
"Specifically, they are worried about the preemption clause that would allow state attorneys general to bring suits based on violations of the CFPA and the scope of what businesses are covered," Matthews said.
He suggested business leaders contact their congressional representative to let them hear that the proposed CFPA needs significant modification before it hits the President's desk. Some key targets include Democratic members of the Senate Banking Committee, including Tim Johnson (S.D.), Mark Warner (Va.) and Michael Bennet (Colo.)
"The play will be in the Senate and the good thing about the banking committee is that it has a number of moderates who can influence how this debate turns out," Matthews said.
As suggested above, please contact your representative to relay your concerns about the proposed CFPA. You can click here for a list of August Town Hall Meetings of members of Congress. If you need help finding and contacting your elected representatives or to set up a meeting to express your concern about the CFPA, click here. Check out this outline of the powers of the proposed CFPA and this ALTA one-pager with talking points on the impact on the title industry.
