DATE
The Honorable SENATOR
United States Senate
ADDRESS
Washington, DC 20510
Dear Senator XX:
As the STATE State Chamber of Commerce with more than ## members
employing over ## workers in our state’s private sector, we urge you to oppose
S.3052, the Ending Taxpayer Bailouts by Making Wall Street Pay Act of 2010.
While we agree that we need to strengthen consumer protection laws, we are
concerned this bill will have significant unintended consequences that will harm
consumers, rather than protect them.
In shaping this legislation, you have a choice; either use this as an
opportunity to modernize the regulatory structure in a way that will protect
investors and consumers while also providing for vibrant capital markets for this
next century—or propose short-sighted solutions that are focused on more
regulation than better and smarter regulation that will do more harm than good
to an economy struggling to recover. Unfortunately, the proposed Consumer
Financial Protection Agency/Bureau (CFPA/B) falls in this latter category. This
letter serves to highlight why the CFPA/B is the wrong way – and what we think
is a better way to strengthen consumer protection.
First, there are currently 7 federal agencies that Congress already
instructed to protect consumers. Congress ought to hold them accountable and
address the failures within existing regulators – not create another new federal
agency atop a broken regulatory system. The government’s response to failed
government should not just be more government.
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Senator XXX
Second, the Senate bill would give the new regulator unprecedented
power and authority– more so than any other federal financial regulator. Unlike
the Federal Trade Commission or even the Securities and Exchange Commission,
the CFPA/B would be headed by a single director without a bipartisan
commission to provide the necessary checks and balances. This director would
be able to unilaterally write and enforce rules without any meaningful oversight
on its actions—or even the use of a budget of more than $400 million—by
Congress, by the President or even by other federal regulators.
Third, the CFPA?B would have regulatory authority over a vast segment of
the business community. Businesses that have little to do with consumer finance
and certainly didn’t contribute to the financial crisis, would find themselves
under the regulatory oversight of the CFPA/B because they sell their goods and
services to financial institutions, or because they allow customers to pay over time
– either in four or more installments or in which late fees are assessed. For
example – the orthodontist that allows parents to pay for their children’s braces
over time could find him or herself regulated like a financial institution.
Fourth, the CFPA/B would restrict access to credit for STATE small
businesses and consumers at exactly the wrong time. Nothing about this bill will
spur additional lending to small businesses or consumers. By creating significant
disincentives for lending, the CFPA/B will make it much more expensive for
banks to lend. This will result in reduced access to credit, and bring a higher
price to the credit products that are available.
In short, now is absolutely the wrong time to adopt drastic regulations that
will impose new costs on STATE businesses or reduce their access to credit. Small
businesses are struggling from the economic impact of the financial crisis – when
they really had no role in the abuses that occurred, they certainly shouldn’t have
to pay for it twice through an overreaching government response that does more
harm than good.
We agree reform is necessary – but there is a right and a wrong to do it.
We should improve regulation from the ground-up, ensuring existing regulators
have the tools they need to protect consumers. We need legislation that will
weed out the bad actors that push predatory consumer products or fraudulently
mislead consumers about the products they sell. And we need to simplify
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Senator XXX
disclosures to provide consumers with the information they need in a clear and
concise manner that will allow an informed and responsible financial decision.
Please consider the unintended consequences on consumers and the
economy. We urge you to oppose S.3052, Ending Taxpayer Bailouts by Making
Wall Street Pay Act of 2010.
Thank you.
Sincerely,
NAME
President