Bachus Points to Consumer Protection, GSE Reform and Securities Issues as Top Agenda Items
Feb. 16, 2011 During a speech in Washington, D.C. on February 15, Chairman of the House Financial Services Committee Spencer Bachus (R-AL) provided insight into the direction of the Committee's work for the 112th Congress and shared his outlook on the newly created Consumer Financial Protection Bureau (CFPB).
Speaking to the Women in Housing and Finance (WHF) audience, Chairman Bachus first prefaced his comments by saying that any economic recovery must be initiated by addressing unsustainable government spending and the U.S. national debt. "Addressing those issues will ultimately determine the health of the housing industry and the financial services industry," said Bachus.
He followed those comments with discussion on three areas: margin requirements for derivatives markets, government sponsored enterprise (GSE) and housing reform and consumer protection. Regarding derivatives, he urges federal regulators to ensure that proposed rules stemming from the Dodd-Frank Act focus only on transactions between financial entities, rather than those transactions that involve non-financial end-users.
On the topic of home ownership and GSE reform, Chairman Bachus said that the private market must be involved and that the government needs to be taken out of the business of guaranteeing the nation's mortgages through Fannie Mae and Freddie Mac. He reiterated the importance of home ownership, but believes it can be driven by the private market, and not the government.
In comments addressing the CFPB, Chairman Bachus categorized the new agency as "problematic" for several reasons. He's concerned about government involvement in consumer financial product choices, and the regulatory and compliance burden for smaller institutions. He also mentioned uncertainty about separating consumer protection from safety and soundness.
Chairman Bachus was also asked about the proposed rules regarding interchange fees for debit cards. He acknowledged the fact that smaller institutions rely on interchange fees for revenue, and that he does not want to see "community banks or credit unions start failing due to this issue." A hearing is being held tomorrow on the interchange issue by the House Financial Services Subcommittee on Financial Institutions and Consumer Credit.
On March 2, NASCUS board members are meeting with Chairman Bachus to continue discussion on capital reform for credit unions and other issues.