FOR IMMEDIATE RELEASE

DATE: May 5, 2010

Americans for Financial Reform (AFR), including nation’s leading consumer groups, opposes the Shelby substitute (amendment #3826) to replace Title X of S. 3217, RAFSA, the Consumer Financial Protection Bureau, with a weak alternative

VOTE NO, NO INDEPENDENCE,

NO FUNDING FOR ENFORCEMENT,

NO ENFORCEMENT OVER ANY BANKS

WHAT THIS MEANS:

NO AUTHORITY TO PROTECT FAMILIES

— It cannot even act until after many consumers have been harmed —

A consumer financial protection watchdog must be independent of the banks, have its own adequate funding and staff, and not be subject to having its work stopped by any banking regulator.  It must be able to police the marketplace in credit and similar financial products and services no matter what type of entity offers those products or services. The Shelby amendment in the nature of a substitute fails to meet these standards.

Ø      NO INDEPENDENCE: The CFPD would be a division in the FDIC without autonomy.  It could not even finalize a rule without FDIC approval.

Ø      INADEQUATE RESOURCES BY DESIGN: Funding is by assessments sufficient to cover supervisory and rule-making expenses only – not enforcement.

Ø      ENFORCEMENT VERY LIMITED

• No enforcement at all over any bank or other type of depository institution.
• Non-mortgage companies never subject to supervision unless they have a pattern or practice of breaking the law within the past three years.
• Not even all non-bank mortgage companies will be covered by supervisory oversight.
• Same limits apply to enforcement unless another federal agency has referred a matter for enforcement.

Ø      ABDICATES RESPONSIBILITIES TO ENSURE A NON-DISCRIMINATORY MARKETPLACE: It omits numerous functions and goals relating to civil rights that are part of S. 3217.

There is less to this than meets the eye. It should be rejected. Oppose this amendment and oppose all amendements to weaken the consumer protection provisions of S. 3217.