October 15, 2009

WASHINGTON - Congressman Spencer Bachus, the top Republican on the Financial Services Committee, made the following statement today during consideration of the ‘tricks and traps' amendment offered by Rep. Brad Miller.

"Mr. Chairman, the amendment purports to carveout small institutions from the regulatory dragnet of the CFPA.

"The carveouts in this amendment are illusions. As Elizabeth Warren likes to say: this is ‘tricks and traps,' a classic ‘bait and switch.'

"Although banks with fewer than $10 billion in assets and credit unions with fewer than $1.5 billion in assets seem to be ‘carved out' of the CFPA's jurisdiction, they are NOT.

"All we need to ask is: ‘who is going to write the rules?' The answer is clear: the CFPA, a regulator operating under a mandate that encourages them to ignore anything but consumer affairs. This single-minded focus will expose small community institutions to inevitably conflicting mandates and more onerous regulations than they could have ever dreamed. Warning to small institutions that might like how this amendment sounds: just wait for when the first aggressive CFPA tsar steps in and supplants your regulator.

"Prudential regulators will examine small institutions until the CFPA taps them on the shoulder and assumes that responsibility at the Director's whim.

"If Members want to protect the customers of community financial institutions, the best way to do that is to support the Biggert substitute.

"The Biggert substitute guarantees that prudential regulators with the most complete understanding of the regulated institutions will offer fair and appropriate financial products. Unlike the CFPA-a disconnected, super-agency completely divorced from the safety and soundness considerations of the bank regulators-the Council envisioned by Mrs. Biggert appropriately combines safety and soundness and consumer protection."

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