Download letter - US Chamber of Commerce
December 1, 2009 TO THE MEMBERS OF THE UNITED STATES CONGRESS: The undersigned chambers of commerce, associations, and businesses, representing millions of employers who create jobs, write today to urge you to oppose H.R. 3126, the “Consumer Financial Protection Agency Act.” While we agree that the financial crisis exposed failures in consumer protection regulation that need to be addressed, we are concerned this bill would do far more harm than good – for consumers, for the business community, and for the overall economy. Rather than address the failures within existing regulatory agencies, this bill would create a new and massive government bureaucracy that would reduce consumer choice, stifle innovation, and restrict access to credit just as we are beginning to see signs of an economic recovery. The CFPA would have sweeping and broad authority to regulate businesses across the spectrum of industry, even if they are not in the business of consumer finance. Broad definitions and vague regulatory standards would give the CFPA unending jurisdiction and unchecked power, exposing businesses both to its regulatory authority and the litigation exposure that comes with it. The uncertainty in regulatory standards and increased liability create significant disincentives for institutions to lend to consumers, which restricts access to credit and increases the price of credit products for consumers. In addition, rather than establish a new national standard to simplify and bring uniformity to consumer protection laws, the bill would do exactly the opposite. It would create conflicts among state and federal law, thereby adding to the complexity and confusion for consumers and for the businesses that seek to comply. Lastly, the agency takes a one-size-fits-all approach to consumer protection that ignores the fact that small businesses often use consumer financial products to supplement inadequate business lines of credit and to meet short-term capital needs. Therefore, a push towards standard or low risk products intended to protect ordinary consumers would deny informed and sophisticated small business owners of the products they depend on to grow their businesses and create jobs. Instead, Congress should improve regulation from the ground-up by ensuring existing regulators have the tools they need to protect consumers. We need reform that will weed out the bad actors that push predatory consumer products or fraudulently mislead consumers about the products they sell. And we need to simplify disclosures to provide consumers with the information they need in a clear and concise manner that will allow an informed and responsible financial decision. Lastly, we must make sure that consumers and businesses that have already suffered the consequences of the financial crisis do not pay the price twice through ill-conceived remedies that would further reduce access to credit when our communities can least afford it. Please consider the unintended consequences on consumers, on businesses, and on the economy. We urge you to oppose the Consumer Financial Protection Agency Act.