Creating Advisory Boards in the CFPB for Small Business, Community Banks, and Credit Unions (H.R. 1195)

What is H.R. 1195?

(Updated May 6, 2020)

This bill would establish advisory boards for small businesses, credit unions, and community banks to advise and consult with the Bureau of Consumer Financial Protection (CFPB) on financial products and regulations that affect their industries and consumers.

"Ensuring that consumers get the information they need to make the financial decisions they believe are best for themselves and their families — that prices are clear up front, that risks are visible, and that nothing is buried in fine print. In a market that works, consumers should be able to make direct comparisons among products and no provider should be able to use unfair, deceptive, or abusive practices." 

All three advisory boards would be made up of 15 to 20 members and would meet at least two times annually, or at the call of the CFPB Director. Advisory board members who aren’t full-time federal employees would be entitled to compensation by the CFPB for their service and be provided travel expenses to attend CFPB meetings.

Argument in favor

Small businesses, community banks, credit unions, and the people who use them are all affected by CFPB’s regulations. They should all have a seat at the table to voice their concerns.

Argument opposed

Why should financial institutions and businesses have an advisory role in creating the regulations? The Consumer Financial Protection Bureau, is for consumers not businesses.

Impact

People who use the services of community banks, credit unions, and small businesses, community banks, credit unions, small businesses, the CFPB, and the CFPB Director.

Cost of H.R. 1195

A current CBO cost estimate is unavailable. In August 2014 the CBO analyzed a previous version of this legislation, and estimated that the CFPB would spend less than $500,000 each year to support the three advisory groups. It projected that implementing the legislation would cost about $4 million over the 2015-2024 period.

Additional Info

In-Depth:

A version of this bill was introduced in April 2014, but failed to receive a vote before the end of the 113th Congress.

As for the problem this bill is trying to fix, one of this bill’s co-sponsors, Rep. Denny Heck (D-WA) said of the 2014 version of this bill that “smaller operators in finance have a tougher time being heard,” and that “local financial service providers can parter with CFPB to better protect consumers.”

Media:

Sponsoring Rep. Robert Pittenger (R-NC) Press Release

CBO Estimate (Previous Version)

World News

Consumer Financial Services Law Monitor (Previous Version)

Law 360  (Previous Version)

American Bankers Association (In Favor)