Dodd-Frank Update

Yesterday, House Financial Services Committee Ranking Member Barney Frank sent a letter to CFPB Acting Director Raj Date regarding oversight of non-bank financial entities – a day after meeting with AFSA member company executives.

While Frank acknowledged that the CFPB cannot exercise authority over this sector until it has a confirmed director, he urges the Bureau to be prepared for when it gains this authority. “As the Bureau prepares for the day that it is able to exercise authority over nonbank financial firms, I urge that the staff pay close attention to the differences among products offered by nonbank institutions, and to be mindful of Congress’ intent in financial reform that state consumer protection laws be preserved to the extent possible,” Frank wrote. Frank then notes that “key differences” exist in “product characteristics between payday, car title, and other high-cost secured loans, and more traditional closed-end unsecured lending and related products.” The Congressman’s letter concludes by encouraging the CFPB “to coordinate and work with the states to preserve” existing consumer protections regarding financial products offered by non-banks.

Frank’s letter highlights the importance of Capitol Hill visits by our members. On Tuesday, AFSA member representatives raised these concerns with Barney Frank during a town-hall meeting held at the Capitol Visitor Center in conjunction with AFSA’s Annual Meeting. AFSA members should be encouraged that members of Congress do listen to voters’ concerns and that meeting with them one-on-one can have positive results.

For more information, contact AFSA Executive Vice President Bill Himpler at bhimpler@afsamail.org or 202-466-8616.