Release Date: Dec 08, 2009Contact: 888-249-NEWS
U.S. Chamber Launches Next Phase In Campaign Against the CFPA
Calls for Alternative Approach; Unveils New National Ads
WASHINGTON, D.C.—The U.S. Chamber of Commerce today initiated a new phase of its campaign opposing the proposed Consumer Financial Protection Agency (CFPA), recommending an alternative approach that will strengthen consumer protection without adding new regulatory layers and unnecessary government bureaucracy. The Chamber also unveiled national television ads that begin running this week.
"The CFPA is the wrong approach to consumer protection," said David Hirschmann, president and CEO of the Chamber's Center for Capital Markets Competitiveness. "Rather than directly addressing the failures in regulation that contributed to the current economic crisis, the CFPA simply adds a new agency with unprecedented power on top of a broken regulatory system."
According to the Chamber, the seven regulatory agencies Congress tasked with protecting consumers currently have the authority to prevent most, if not all, the abuses that brought harm to consumers. The Chamber retained Andy Pincus of Mayer Brown to conduct an analysis of current regulatory problems and develop recommendations on strengthening existing weaknesses and improving consumer protections.
"The right approach to improving consumer protection is to first take immediate steps to address the agencies' failure to use their authority to monitor potential abuses and take the necessary actions to stop them," continued Hirschmann. "Where there are gaps in regulatory authority, Congress should fill them."
Specifically, the Chamber recommended creating a Consumer Protection Council to ensure coordination of regulatory and enforcement actions among the federal financial regulators. The council would ensure regulatory gaps are eliminated, prescribe consistent disclosure and examination standards and identify areas in which new regulations are necessary.
"Unfortunately the CFPA takes a backward approach," Hirschmann added. "Rather than focusing on these areas, it focuses on giving a new government agency unprecedented power to regulate industries across the spectrum—not just financial institutions, but hundreds of thousands of other businesses such as every retailer that sells gift cards, every high school and college that provides financial literacy courses, technology companies, media companies, lawyers who advise consumers on tax or debt matters, and many retailers and utilities and doctors that let consumers pay their bills over time."
In addition, the Chamber argued that the CFPA would create a fragmented system of regulation that creates inconsistencies among disclosures and regulatory standards.
"The lack of preemption in the legislation creates not just one—but 52 new regulatory regimes governing consumer financial products," Hirschmann said. "Consumers already have a difficult time navigating the system – this will only make it worse."
In conjunction with today's announcement, the Chamber unveiled new television advertisements that will run nationally and in a number of key states, beginning today. The ad entitled "No Sleep" illustrates the anxieties felt by small business owners as they struggle to get the capital they need to grow and create jobs, leading to many sleepless nights. Click here for a copy of the script.
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. Fundamental to this effort, the Chamber believes we must eliminate duplicative and overlapping layers of regulation and enforcement that undermine efficiency.
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 is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.
# # #