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CFPB NFIP changes see committee action
WASHINGTON (5/16/11)--Separate pieces of legislation addressing the Consumer Financial Protection Bureau (CFPB) and the National Flood Insurance Program (NFIP), respectively, moved further forward through Congress late last week. The bills were officially approved on Friday following an early Thursday House Financial Services Committee markup session. Three pieces of CFPB-related legislation were approved by the Committee, and could now move on to the full House at some point. The first, known as the Responsible Consumer Financial Protection Act, would replace the proposed single CFPB director position with a five-person panel. The Consumer Financial Protection Safety and Soundness Improvement Act would strengthen the Financial Stability Oversight Council's (FSOC) review authority over regulations that are issued by the CFPB by replacing a proposed two-thirds voting approval threshold with a simple majority threshold. The third piece of legislation would not, as scheduled, transfer several consumer-related regulatory functions to the CFPB if that agency does not have a director in place when it officially begins its work on July 21. Committee Chairman Rep. Spencer Bachus (R-Ala.) following the vote said that his committee “supports robust consumer protection,” adding, however, that “real oversight and accountability” of government bureaucracies like the CFPB is vital. Credit Union National Association Vice President of Legislative Affairs Ryan Donovan has said that the final fate of the CFPB-related bills is not certain. "We have seen very little appetite in the Senate to consider these types of changes to Dodd-Frank Act," he added. There is a great deal of volatility surrounding the CFPB as it nears its scheduled start date of July 21, with a group of 44 Republican Senators recently saying that they would not confirm any potential CFPB director, "regardless of party affiliation," unless structural changes are made to the bureau. A CFPB leader has not yet been nominated by the White House. The NFIP-related legislation, which was passed out of the Committee during the same early Thursday markup session, would preserve the rights of credit unions to protect their collateral from flood hazards and would clarify that flood insurance purchased by credit unions "would date back to the date the existing policy lapsed or became insufficient in coverage amount, including any premiums or fees incurred during the 45-day notification period." The bill would also extend NFIP reauthorization for an additional 5 years. The NFIP is set to expire on Sept. 30. CUNA has backed these planned changes to the NFIP.


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