79–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 115–668 

BUSINESS OF INSURANCE REGULATORY REFORM ACT OF 

2017 

MAY 10, 2018.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. HENSARLING, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 3746] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 3746) to amend the Consumer Financial Protection Act 

of 2010 to clarify the authority of the Bureau of Consumer Financial Protection with respect to persons regulated by a State insurance regulator, and for other purposes, having considered the same, 

report favorably thereon without amendment and recommend that 

the bill do pass. 

PURPOSE AND SUMMARY

Introduced by Representative Sean Duffy on September 12, 2017, 

H.R. 3746, the ‘‘Business of Insurance Regulatory Reform Act of 

2017’’ amends the Consumer Financial Protection Act of 2010, 

which is Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, to revise the authority of the Bureau of Consumer Financial Protection (Bureau) over activities regulated by a 

state insurance regulator. The Bureau may not enforce the provisions of Title X of the Dodd-Frank Act against any person regulated by a state insurance regulator who offers a consumer financial product or service, to the extent that person is engaged in the 

business of insurance. If a person engaged in the business of insurance is regulated by a state insurance regulator but otherwise subVerDate Sep 11 2014 05:38 May 11, 2018 Jkt 079006 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\HR668.XXX HR668
2 

1Dodd-Frank Act § 1027(f). 

2 12 U.S.C. § 5481(3). 

3 15 U.S.C. §§ 1011–1015. 

4https://www.consumerfinance.gov/policy-compliance/enforcement/actions/dealers-financialservices-llc/. 5http://files.consumerfinance.gov/f/201306_cfpb_consent-order-004.pdf. 

ject to Title X of the Dodd-Frank Act, the Bureau must construe 

its authority narrowly. 

BACKGROUND AND NEED FOR LEGISLATION

Title X of the Dodd-Frank Act authorizes the Bureau to regulate 

consumer financial products and services, such as extending credit, 

loan servicing, debt collection, deposit taking, providing payment 

instruments, check cashing, consumer reporting, etc. However, Section 1027 of the Dodd-Frank excludes several enumerated products 

and services from the Bureau’s jurisdiction, including the business 

of insurance as conducted by any entity regulated by a state insurance regulator.1

The Dodd-Frank Act defines the ‘‘business of insurance’’ as practices that include: 

the writing of insurance or the reinsuring of risks by an 

insurer, including all acts necessary to such writing or reinsuring and the activities relating to the writing of insurance or the reinsuring of risks conducted by persons who 

act as, or are, officers, directors, agents, or employees of 

insurers or who are other persons authorized to act on behalf of such persons.2

In addition, the Bureau is prohibited from regulating the business of insurance by the existence of the McCarran Ferguson Act,3

which exempts the business of insurance from federal regulation. 

Despite this explicit prohibition, the Bureau, under the leadership of its former Director, demonstrated an interest in insurance 

products and has pushed the boundaries of its own authority by 

regulating products that would otherwise fall under the purview of 

state insurance regulators. In 2013, the Bureau issued an enforcement action against a bank and its service provider for allegedly 

deceptive sales of ‘‘add-on’’ GAP insurance products by the bank’s 

service provider.4 According to the consent order, the Bureau found 

Unfair Deceptive and Abusive Acts or Practices violations for: 

‘‘(a) deceptively marketing the prices of an add-on vehicle service contract and an add-on GAP insurance product, 

and (b) deceptively marketing the scope of the coverage of 

a vehicle service contract.5

Despite the Dodd-Frank Act specific restrictions on the Bureau’s 

authority over the sale of optional insurance products, which are 

not required in order for a consumer to obtain a financial product 

or service, by a bank or service provider. 

As a federal regulatory agency, the law limits the Bureau’s regulatory authorities, and therefore, because every state has a state 

insurance regulator to govern the sale of insurance, and the DoddFrank Act only discusses the business of insurance in order to exempt it from the Bureau’s purview, it is clear that Congressional 

intent was to prohibit the Bureau’s regulation of the business of insurance, but explicitly sought to exclude the Bureau from doing so. 

3 

H.R. 3746 would clarify that state insurance regulators hold primary jurisdiction to enforce consumer protection standards related 

to the business of insurance. 

HEARINGS

The Committee on Financial Services’ Subcommittee on Financial Institutions and Consumer Credit held a hearing examining 

matters relating to H.R. 3746 on December 7, 2017. 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

January 17 and 18, 2018, and ordered H.R. 3746 to be reported favorably by a recorded vote of 37 yeas to 18 nays (Record vote no. 

FC–141), a quorum being present. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. The sole recorded 

vote was on a motion by Chairman Hensarling to report the bill favorably to the House without amendment. The motion was agreed 

to by a recorded vote of 37 yeas to 18 nays (Record vote no. FC– 

141), a quorum being present. 

4 


Insert offset folio 5 here HR668.001
5 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the findings and recommendations of the Committee based on oversight activities under clause 2(b)(1) of rule X 

of the Rules of the House of Representatives, are incorporated in 

the descriptive portions of this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee states that H.R. 3746 will clarify that state insurance regulators hold primary jurisdiction to enforce consumer protection standards related to the business of insurance. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATES

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, April 10, 2018. 

Hon. JEB HENSARLING, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3746, the Business of Insurance Regulatory Reform Act of 2017. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Stephen Rabent. 

Sincerely, 

KEITH HALL, Director. 

Enclosure. 

H.R. 3746—Business of Insurance Regulatory Reform Act of 2017 

Under current law, the Consumer Financial Protection Bureau 

(CFPB) enforces federal consumer financial protection laws except 

when enforcement would involve entities’ that are subject to state 

insurance regulation. That prohibition does not apply, however, for 

those entities’ transactions involving consumer financial products 

or services or to the extent that an entity is subject to consumer 

financial protection laws. 

6 

H.R. 3746 would clarify that the CFPB cannot enforce consumer 

financial protection laws on entities to the extent that they are engaged in the business of insurance, whether or not those entities 

offer products or services that are subject to consumer financial 

protection laws. Other lines of business for those entities would 

continue to be subject to CFPB enforcement. 

Using information from the CFPB, CBO estimates that enacting 

H.R. 3746 would have no significant effect on the agency’s costs or 

operations because the bill would primarily codify current agency 

enforcement practices. 

CBO estimates that implementing H.R. 3746 could reduce civil 

penalties collected by the CFPB (which are recorded in the budget 

as revenues) and the subsequent direct spending of those penalties 

by slightly limiting the scope of enforcement cases the agency may 

pursue. Therefore, pay-as-you-go procedures apply. However, CBO 

estimates that those effects would not be significant over the 2018– 

2028 period. 

CBO estimates that enacting H.R. 3746 would not increase net 

direct spending or significantly increase on-budget deficits in any 

of the four consecutive 10-year periods beginning in 2029. 

H.R. 3746 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act. 

The CBO staff contact for this estimate is Stephen Rabent. The 

estimate was approved by H. Samuel Papenfuss, Deputy Assistant 

Director for Budget Analysis. 

FEDERAL MANDATES STATEMENT

This information is provided in accordance with section 423 of 

the Unfunded Mandates Reform Act of 1995. 

The Committee has determined that the bill does not contain 

Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental 

mandate on State, local, or tribal governments. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of the section 102(b)(3) of the 

Congressional Accountability Act. 

EARMARK IDENTIFICATION

With respect to clause 9 of rule XXI of the Rules of the House 

of Representatives, the Committee has carefully reviewed the provisions of the bill and states that the provisions of the bill do not 

contain any congressional earmarks, limited tax benefits, or limited 

tariff benefits within the meaning of the rule. 

7 

DUPLICATION OF FEDERAL PROGRAMS

In compliance with clause 3(c)(5) of rule XIII of the Rules of the 

House of Representatives, the Committee states that no provision 

of the bill establishes or reauthorizes: (1) a program of the Federal 

Government known to be duplicative of another Federal program; 

(2) a program included in any report from the Government Accountability Office to Congress pursuant to section 21 of Public 

Law 111–139; or (3) a program related to a program identified in 

the most recent Catalog of Federal Domestic Assistance, published 

pursuant to the Federal Program Information Act (Pub. L. No. 95– 

220, as amended by Pub. L. No. 98–169). 

DISCLOSURE OF DIRECTED RULEMAKING

Pursuant to section 3(i) of H. Res. 5, (115th Congress), the following statement is made concerning directed rulemakings: The 

Committee estimates that the bill requires no directed rulemakings 

within the meaning of such section. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This section cites H.R. 3746 as the ‘‘Business of Insurance Regulatory Reform Act of 2017.’’ 

Section 2. Clarification to the authority of the Bureau with respect 

to persons regulated by a state insurance regulator 

This section amends Section 1027(f) of the Consumer Financial 

Protection Act of 2010 to clarify the definition of the ‘‘business of 

insurance.’’ Specifically, this bill creates an explicit exception related to Bureau of Consumer Financial Protection authority to regulate insurance. In doing so, the bill limits the Bureau’s jurisdiction over insurance, to the extent a person is engaged in the business of insurance, and state insurance regulators regulate the insurance activities. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

and existing law in which no change is proposed is shown in 

roman): 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

and existing law in which no change is proposed is shown in 

roman): 

CONSUMER FINANCIAL PROTECTION ACT OF 2010 

* * * * * * * 

8 

TITLE X—BUREAU OF CONSUMER 

FINANCIAL PROTECTION 

* * * * * * * 

Subtitle B—General Powers of the Bureau 

* * * * * * * 

SEC. 1027. LIMITATIONS ON AUTHORITIES OF THE BUREAU; PRESERVATION OF AUTHORITIES. 

(a) EXCLUSION FOR MERCHANTS, RETAILERS, AND OTHER SELLERS

OF NONFINANCIAL GOODS OR SERVICES.— (1) SALE OR BROKERAGE OF NONFINANCIAL GOOD OR SERV- ICE.—The Bureau may not exercise any rulemaking, supervisory, enforcement or other authority under this title with respect to a person who is a merchant, retailer, or seller of any 

nonfinancial good or service and is engaged in the sale or brokerage of such nonfinancial good or service, except to the extent that such person is engaged in offering or providing any 

consumer financial product or service, or is otherwise subject 

to any enumerated consumer law or any law for which authorities are transferred under subtitle F or H. 

(2) OFFERING OR PROVISION OF CERTAIN CONSUMER FINANCIAL

PRODUCTS OR SERVICES IN CONNECTION WITH THE SALE OR BRO- KERAGE OF NONFINANCIAL GOOD OR SERVICE.— (A) IN GENERAL.—Except as provided in subparagraph 

(B), and subject to subparagraph (C), the Bureau may not 

exercise any rulemaking, supervisory, enforcement, or 

other authority under this title with respect to a merchant, 

retailer, or seller of nonfinancial goods or services, but only 

to the extent that such person— 

(i) extends credit directly to a consumer, in a case 

in which the good or service being provided is not 

itself a consumer financial product or service (other 

than credit described in this subparagraph), exclusively for the purpose of enabling that consumer to 

purchase such nonfinancial good or service directly 

from the merchant, retailer, or seller; 

(ii) directly, or through an agreement with another 

person, collects debt arising from credit extended as 

described in clause (i); or 

(iii) sells or conveys debt described in clause (i) that 

is delinquent or otherwise in default. 

(B) APPLICABILITY.—Subparagraph (A) does not apply to 

any credit transaction or collection of debt, other than as 

described in subparagraph (C)(i), arising from a transaction described in subparagraph (A)— 

(i) in which the merchant, retailer, or seller of nonfinancial goods or services assigns, sells or otherwise 

conveys to another person such debt owed by the consumer (except for a sale of debt that is delinquent or 

otherwise in default, as described in subparagraph 

(A)(iii)); 

9 

(ii) in which the credit extended significantly exceeds the market value of the nonfinancial good or 

service provided, or the Bureau otherwise finds that 

the sale of the nonfinancial good or service is done as 

a subterfuge, so as to evade or circumvent the provisions of this title; or 

(iii) in which the merchant, retailer, or seller of nonfinancial goods or services regularly extends credit and 

the credit is subject to a finance charge. 

(C) LIMITATIONS.— (i) IN GENERAL.—Notwithstanding subparagraph (B), 

subparagraph (A) shall apply with respect to a merchant, retailer, or seller of nonfinancial goods or services that is not engaged significantly in offering or providing consumer financial products or services. 

(ii) EXCEPTION.—Subparagraph (A) and clause (i) of 

this subparagraph do not apply to any merchant, retailer, or seller of nonfinancial goods or services— 

(I) if such merchant, retailer, or seller of nonfinancial goods or services is engaged in a transaction described in subparagraph (B)(i) or (B)(ii); 

or 

(II) to the extent that such merchant, retailer, 

or seller is subject to any enumerated consumer 

law or any law for which authorities are transferred under subtitle F or H, but the Bureau may 

exercise such authority only with respect to that 

law. 

(D) RULES.— 

(i) AUTHORITY OF OTHER AGENCIES.—No provision of 

this title shall be construed as modifying, limiting, or 

superseding the supervisory or enforcement authority 

of the Federal Trade Commission or any other agency 

(other than the Bureau) with respect to credit extended, or the collection of debt arising from such extension, directly by a merchant or retailer to a consumer exclusively for the purpose of enabling that consumer to purchase nonfinancial goods or services directly from the merchant or retailer. 

(ii) SMALL BUSINESSES.—A merchant, retailer, or 

seller of nonfinancial goods or services that would otherwise be subject to the authority of the Bureau solely 

by virtue of the application of subparagraph (B)(iii) 

shall be deemed not to be engaged significantly in offering or providing consumer financial products or 

services under subparagraph (C)(i), if such person— 

(I) only extends credit for the sale of nonfinancial goods or services, as described in subparagraph (A)(i); 

(II) retains such credit on its own accounts (except to sell or convey such debt that is delinquent 

or otherwise in default); and 

(III) meets the relevant industry size threshold 

to be a small business concern, based on annual 

receipts, pursuant to section 3 of the Small BusiVerDate Sep 11 2014 05:38 May 11, 2018 Jkt 079006 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\HR668.XXX HR668
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ness Act (15 U.S.C. 632) and the implementing 

rules thereunder. 

(iii) INITIAL YEAR.—A merchant, retailer, or seller of 

nonfinancial goods or services shall be deemed to meet 

the relevant industry size threshold described in 

clause (ii)(III) during the first year of operations of 

that business concern if, during that year, the receipts 

of that business concern reasonably are expected to 

meet that size threshold. 

(iv) OTHER STANDARDS FOR SMALL BUSINESS.—With 

respect to a merchant, retailer, or seller of nonfinancial goods or services that is a classified on a 

basis other than annual receipts for the purposes of 

section 3 of the Small Business Act (15 U.S.C. 632) 

and the implementing rules thereunder, such merchant, retailer, or seller shall be deemed to meet the 

relevant industry size threshold described in clause 

(ii)(III) if such merchant, retailer, or seller meets the 

relevant industry size threshold to be a small business 

concern based on the number of employees, or other 

such applicable measure, established under that Act. 

(E) EXCEPTION FROM STATE ENFORCEMENT.—To the extent that the Bureau may not exercise authority under this 

subsection with respect to a merchant, retailer, or seller of 

nonfinancial goods or services, no action by a State attorney general or State regulator with respect to a claim 

made under this title may be brought under subsection 

1042(a), with respect to an activity described in any of 

clauses (i) through (iii) of subparagraph (A) by such merchant, retailer, or seller of nonfinancial goods or services. 

(b) EXCLUSION FOR REAL ESTATE BROKERAGE ACTIVITIES.— (1) REAL ESTATE BROKERAGE ACTIVITIES EXCLUDED.—Without 

limiting subsection (a), and except as permitted in paragraph 

(2), the Bureau may not exercise any rulemaking, supervisory, 

enforcement, or other authority under this title with respect to 

a person that is licensed or registered as a real estate broker 

or real estate agent, in accordance with State law, to the extent that such person— 

(A) acts as a real estate agent or broker for a buyer, seller, lessor, or lessee of real property; 

(B) brings together parties interested in the sale, purchase, lease, rental, or exchange of real property; 

(C) negotiates, on behalf of any party, any portion of a 

contract relating to the sale, purchase, lease, rental, or exchange of real property (other than in connection with the 

provision of financing with respect to any such transaction); or 

(D) offers to engage in any activity, or act in any capacity, described in subparagraph (A), (B), or (C). 

(2) DESCRIPTION OF ACTIVITIES.—The Bureau may exercise 

rulemaking, supervisory, enforcement, or other authority under 

this title with respect to a person described in paragraph (1) 

when such person is— 

(A) engaged in an activity of offering or providing any 

consumer financial product or service, except that the BuVerDate Sep 11 2014 05:38 May 11, 2018 Jkt 079006 PO 00000 Frm 00010 Fmt 6659 Sfmt 6602 E:\HR\OC\HR668.XXX HR668
11 

reau may exercise such authority only with respect to that 

activity; or 

(B) otherwise subject to any enumerated consumer law 

or any law for which authorities are transferred under 

subtitle F or H, but the Bureau may exercise such authority only with respect to that law. 

(c) EXCLUSION FOR MANUFACTURED HOME RETAILERS AND MOD- ULAR HOME RETAILERS.— (1) IN GENERAL.—The Director may not exercise any rulemaking, supervisory, enforcement, or other authority over a 

person to the extent that— 

(A) such person is not described in paragraph (2); and 

(B) such person— 

(i) acts as an agent or broker for a buyer or seller 

of a manufactured home or a modular home; 

(ii) facilitates the purchase by a consumer of a manufactured home or modular home, by negotiating the 

purchase price or terms of the sales contract (other 

than providing financing with respect to such transaction); or 

(iii) offers to engage in any activity described in 

clause (i) or (ii). 

(2) DESCRIPTION OF ACTIVITIES.—A person is described in 

this paragraph to the extent that such person is engaged in the 

offering or provision of any consumer financial product or service or is otherwise subject to any enumerated consumer law or 

any law for which authorities are transferred under subtitle F 

or H. 

(3) DEFINITIONS.—For purposes of this subsection, the following definitions shall apply: 

(A) MANUFACTURED HOME.—The term ‘‘manufactured 

home’’ has the same meaning as in section 603 of the National Manufactured Housing Construction and Safety 

Standards Act of 1974 (42 U.S.C. 5402). 

(B) MODULAR HOME.—The term ‘‘modular home’’ means 

a house built in a factory in 2 or more modules that meet 

the State or local building codes where the house will be 

located, and where such modules are transported to the 

building site, installed on foundations, and completed. 

(d) EXCLUSION FOR ACCOUNTANTS AND TAX PREPARERS.— 

(1) IN GENERAL.—Except as permitted in paragraph (2), the 

Bureau may not exercise any rulemaking, supervisory, enforcement, or other authority over— 

(A) any person that is a certified public accountant, permitted to practice as a certified public accounting firm, or 

certified or licensed for such purpose by a State, or any individual who is employed by or holds an ownership interest with respect to a person described in this subparagraph, when such person is performing or offering to perform— 

(i) customary and usual accounting activities, including the provision of accounting, tax, advisory, or 

other services that are subject to the regulatory authority of a State board of accountancy or a Federal 

authority; or 

12 

(ii) other services that are incidental to such customary and usual accounting activities, to the extent 

that such incidental services are not offered or provided— 

(I) by the person separate and apart from such 

customary and usual accounting activities; or 

(II) to consumers who are not receiving such 

customary and usual accounting activities; or 

(B) any person, other than a person described in subparagraph (A) that performs income tax preparation activities for consumers. 

(2) DESCRIPTION OF ACTIVITIES.— 

(A) IN GENERAL.—Paragraph (1) shall not apply to any 

person described in paragraph (1)(A) or (1)(B) to the extent 

that such person is engaged in any activity which is not 

a customary and usual accounting activity described in 

paragraph (1)(A) or incidental thereto but which is the offering or provision of any consumer financial product or 

service, except to the extent that a person described in 

paragraph (1)(A) is engaged in an activity which is a customary and usual accounting activity described in paragraph (1)(A), or incidental thereto. 

(B) NOT A CUSTOMARY AND USUAL ACCOUNTING ACTIV- ITY.—For purposes of this subsection, extending or 

brokering credit is not a customary and usual accounting 

activity, or incidental thereto. 

(C) RULE OF CONSTRUCTION.—For purposes of subparagraphs (A) and (B), a person described in paragraph (1)(A) 

shall not be deemed to be extending credit, if such person 

is only extending credit directly to a consumer, exclusively 

for the purpose of enabling such consumer to purchase 

services described in clause (i) or (ii) of paragraph (1)(A) 

directly from such person, and such credit is— 

(i) not subject to a finance charge; and 

(ii) not payable by written agreement in more than 

4 installments. 

(D) OTHER LIMITATIONS.—Paragraph (1) does not apply 

to any person described in paragraph (1)(A) or (1)(B) that 

is otherwise subject to any enumerated consumer law or 

any law for which authorities are transferred under subtitle F or H. 

(e) EXCLUSION FOR PRACTICE OF LAW.— 

(1) IN GENERAL.—Except as provided under paragraph (2), 

the Bureau may not exercise any supervisory or enforcement 

authority with respect to an activity engaged in by an attorney 

as part of the practice of law under the laws of a State in 

which the attorney is licensed to practice law. 

(2) RULE OF CONSTRUCTION.—Paragraph (1) shall not be construed so as to limit the exercise by the Bureau of any supervisory, enforcement, or other authority regarding the offering 

or provision of a consumer financial product or service described in any subparagraph of section 1002(5)— 

(A) that is not offered or provided as part of, or incidental to, the practice of law, occurring exclusively within 

the scope of the attorney-client relationship; or 

13 

(B) that is otherwise offered or provided by the attorney 

in question with respect to any consumer who is not receiving legal advice or services from the attorney in connection with such financial product or service. 

(3) EXISTING AUTHORITY.—Paragraph (1) shall not be construed so as to limit the authority of the Bureau with respect 

to any attorney, to the extent that such attorney is otherwise 

subject to any of the enumerated consumer laws or the authorities transferred under subtitle F or H. 

(f) EXCLUSION FOR PERSONS REGULATED BY A STATE INSURANCE

REGULATOR.— (1) IN GENERAL.—No provision of this title shall be construed 

as altering, amending, or affecting the authority of any State 

insurance regulator to adopt rules, initiate enforcement proceedings, or take any other action with respect to a person regulated by a State insurance regulator. Except as provided in 

paragraph (2), the Bureau shall have no authority to exercise 

any power to enforce this title with respect to a person regulated by a State insurance regulator. 

(2) øDESCRIPTION OF ACTIVITIES.—¿ øParagraph (1)¿ EXCEP- TIONS.— (A) AUTHORITY.—Paragraph (1) does not apply to any person described in such paragraph to the extent that such person is engaged in the offering or provision of any consumer financial product 

or service or is otherwise subject to any enumerated consumer law 

or any law for which authorities are transferred under subtitle F 

or H. 

(B) LIMITATION.—With respect to a person regulated by a 

State insurance regulator— 

(i) and if such person is offering or providing a consumer financial product or service, the Bureau may not 

enforce this title with respect to such person to the extent such person is engaged in the business of insurance; or 

(ii) and if such person is subject to any enumerated 

consumer law or any law for which authorities are 

transferred under subtitle F or H, the authority of the 

Bureau to enforce such law with respect to such person 

shall be narrowly construed to the extent such person 

is engaged in the business of insurance. 

(3) STATE INSURANCE AUTHORITY UNDER GRAMM-LEACH-BLILEY.—Notwithstanding paragraph (2), the Bureau shall not exercise any authorities that are granted a State insurance authority under section 505(a)(6) of the Gramm-Leach-Bliley Act 

with respect to a person regulated by a State insurance authority. 

(4) RULE OF CONSTRUCTION.—The enforcement of this title 

shall be broadly construed in favor of the authority of a State 

insurance regulator with respect to a person regulated by a 

State insurance regulator. 

(g) EXCLUSION FOR EMPLOYEE BENEFIT AND COMPENSATION

PLANS AND CERTAIN OTHER ARRANGEMENTS UNDER THE INTERNAL

REVENUE CODE OF 1986.— 

(1) PRESERVATION OF AUTHORITY OF OTHER AGENCIES.—No 

provision of this title shall be construed as altering, amending, 

14 

or affecting the authority of the Secretary of the Treasury, the 

Secretary of Labor, or the Commissioner of Internal Revenue 

to adopt regulations, initiate enforcement proceedings, or take 

any actions with respect to any specified plan or arrangement. 

(2) ACTIVITIES NOT CONSTITUTING THE OFFERING OR PROVI- SION OF ANY CONSUMER FINANCIAL PRODUCT OR SERVICE.—For 

purposes of this title, a person shall not be treated as having 

engaged in the offering or provision of any consumer financial 

product or service solely because such person is— 

(A) a specified plan or arrangement; 

(B) engaged in the activity of establishing or maintaining, for the benefit of employees of such person (or for 

members of an employee organization), any specified plan 

or arrangement; or 

(C) engaged in the activity of establishing or maintaining a qualified tuition program under section 529(b)(1) of 

the Internal Revenue Code of 1986 offered by a State or 

other prepaid tuition program offered by a State. 

(3) LIMITATION ON BUREAU AUTHORITY.— 

(A) IN GENERAL.—Except as provided under subparagraphs (B) and (C), the Bureau may not exercise any rulemaking or enforcement authority with respect to products 

or services that relate to any specified plan or arrangement. 

(B) BUREAU ACTION PURSUANT TO AGENCY REQUEST.— (i) AGENCY REQUEST.—The Secretary and the Secretary of Labor may jointly issue a written request to 

the Bureau regarding implementation of appropriate 

consumer protection standards under this title with 

respect to the provision of services relating to any 

specified plan or arrangement. 

(ii) AGENCY RESPONSE.—In response to a request by 

the Bureau, the Secretary and the Secretary of Labor 

shall jointly issue a written response, not later than 

90 days after receipt of such request, to grant or deny 

the request of the Bureau regarding implementation of 

appropriate consumer protection standards under this 

title with respect to the provision of services relating 

to any specified plan or arrangement. 

(iii) SCOPE OF BUREAU ACTION.—Subject to a request 

or response pursuant to clause (i) or clause (ii) by the 

agencies made under this subparagraph, the Bureau 

may exercise rulemaking authority, and may act to enforce a rule prescribed pursuant to such request or response, in accordance with the provisions of this title. 

A request or response made by the Secretary and the 

Secretary of Labor under this subparagraph shall describe the basis for, and scope of, appropriate consumer protection standards to be implemented under 

this title with respect to the provision of services relating to any specified plan or arrangement. 

(C) DESCRIPTION OF PRODUCTS OR SERVICES.—To the extent that a person engaged in providing products or services relating to any specified plan or arrangement is subject to any enumerated consumer law or any law for which 

15 

authorities are transferred under subtitle F or H, subparagraph (A) shall not apply with respect to that law. 

(4) SPECIFIED PLAN OR ARRANGEMENT.—For purposes of this 

subsection, the term ‘‘specified plan or arrangement’’ means 

any plan, account, or arrangement described in section 220, 

223, 401(a), 403(a), 403(b), 408, 408A, 529, 529A, or 530 of the 

Internal Revenue Code of 1986, or any employee benefit or 

compensation plan or arrangement, including a plan that is 

subject to title I of the Employee Retirement Income Security 

Act of 1974, or any prepaid tuition program offered by a State. 

(h) PERSONS REGULATED BY A STATE SECURITIES COMMISSION.— (1) IN GENERAL.—No provision of this title shall be construed 

as altering, amending, or affecting the authority of any securities commission (or any agency or office performing like functions) of any State to adopt rules, initiate enforcement proceedings, or take any other action with respect to a person regulated by any securities commission (or any agency or office 

performing like functions) of any State. Except as permitted in 

paragraph (2) and subsection (f), the Bureau shall have no authority to exercise any power to enforce this title with respect 

to a person regulated by any securities commission (or any 

agency or office performing like functions) of any State, but 

only to the extent that the person acts in such regulated capacity. 

(2) DESCRIPTION OF ACTIVITIES.—Paragraph (1) shall not 

apply to any person to the extent such person is engaged in the 

offering or provision of any consumer financial product or service, or is otherwise subject to any enumerated consumer law or 

any law for which authorities are transferred under subtitle F 

or H. 

(i) EXCLUSION FOR PERSONS REGULATED BY THE COMMISSION.— (1) IN GENERAL.—No provision of this title may be construed 

as altering, amending, or affecting the authority of the Commission to adopt rules, initiate enforcement proceedings, or 

take any other action with respect to a person regulated by the 

Commission. The Bureau shall have no authority to exercise 

any power to enforce this title with respect to a person regulated by the Commission. 

(2) CONSULTATION AND COORDINATION.—Notwithstanding 

paragraph (1), the Commission shall consult and coordinate, 

where feasible, with the Bureau with respect to any rule (including any advance notice of proposed rulemaking) regarding 

an investment product or service that is the same type of product as, or that competes directly with, a consumer financial 

product or service that is subject to the jurisdiction of the Bureau under this title or under any other law. In carrying out 

this paragraph, the agencies shall negotiate an agreement to 

establish procedures for such coordination, including procedures for providing advance notice to the Bureau when the 

Commission is initiating a rulemaking. 

(j) EXCLUSION FOR PERSONS REGULATED BY THE COMMODITY FU- TURES TRADING COMMISSION.— (1) IN GENERAL.—No provision of this title shall be construed 

as altering, amending, or affecting the authority of the Commodity Futures Trading Commission to adopt rules, initiate 

16 

enforcement proceedings, or take any other action with respect 

to a person regulated by the Commodity Futures Trading Commission. The Bureau shall have no authority to exercise any 

power to enforce this title with respect to a person regulated 

by the Commodity Futures Trading Commission. 

(2) CONSULTATION AND COORDINATION.—Notwithstanding 

paragraph (1), the Commodity Futures Trading Commission 

shall consult and coordinate with the Bureau with respect to 

any rule (including any advance notice of proposed rulemaking) 

regarding a product or service that is the same type of product 

as, or that competes directly with, a consumer financial product or service that is subject to the jurisdiction of the Bureau 

under this title or under any other law. 

(k) EXCLUSION FOR PERSONS REGULATED BY THE FARM CREDIT

ADMINISTRATION.— 

(1) IN GENERAL.—No provision of this title shall be construed 

as altering, amending, or affecting the authority of the Farm 

Credit Administration to adopt rules, initiate enforcement proceedings, or take any other action with respect to a person regulated by the Farm Credit Administration. The Bureau shall 

have no authority to exercise any power to enforce this title 

with respect to a person regulated by the Farm Credit Administration. 

(2) DEFINITION.—For purposes of this subsection, the term 

‘‘person regulated by the Farm Credit Administration’’ means 

any Farm Credit System institution that is chartered and subject to the provisions of the Farm Credit Act of 1971 (12 U.S.C. 

2001 et seq.). 

(l) EXCLUSION FOR ACTIVITIES RELATING TO CHARITABLE CONTRIBUTIONS.— 

(1) IN GENERAL.—The Director and the Bureau may not exercise any rulemaking, supervisory, enforcement, or other authority, including authority to order penalties, over any activities related to the solicitation or making of voluntary contributions to a tax-exempt organization as recognized by the Internal Revenue Service, by any agent, volunteer, or representative 

of such organizations to the extent the organization, agent, volunteer, or representative thereof is soliciting or providing advice, information, education, or instruction to any donor or potential donor relating to a contribution to the organization. 

(2) LIMITATION.—The exclusion in paragraph (1) does not 

apply to other activities not described in paragraph (1) that are 

the offering or provision of any consumer financial product or 

service, or are otherwise subject to any enumerated consumer 

law or any law for which authorities are transferred under 

subtitle F or H. 

(m) INSURANCE.—The Bureau may not define as a financial product or service, by regulation or otherwise, engaging in the business 

of insurance. 

(n) LIMITED AUTHORITY OF THE BUREAU.—Notwithstanding subsections (a) through (h) and (l), a person subject to or described in 

one or more of such provisions— 

(1) may be a service provider; and 

(2) may be subject to requests from, or requirements imposed 

by, the Bureau regarding information in order to carry out the 

17 

responsibilities and functions of the Bureau and in accordance 

with section 1022, 1052, or 1053. 

(o) NO AUTHORITY TO IMPOSE USURY LIMIT.—No provision of this 

title shall be construed as conferring authority on the Bureau to establish a usury limit applicable to an extension of credit offered or 

made by a covered person to a consumer, unless explicitly authorized by law. 

(p) ATTORNEY GENERAL.—No provision of this title, including section 1024(c)(1), shall affect the authorities of the Attorney General 

under otherwise applicable provisions of law. 

(q) SECRETARY OF THE TREASURY.—No provision of this title shall 

affect the authorities of the Secretary, including with respect to 

prescribing rules, initiating enforcement proceedings, or taking 

other actions with respect to a person that performs income tax 

preparation activities for consumers. 

(r) DEPOSIT INSURANCE AND SHARE INSURANCE.—Nothing in this 

title shall affect the authority of the Corporation under the Federal 

Deposit Insurance Act or the National Credit Union Administration 

Board under the Federal Credit Union Act as to matters related to 

deposit insurance and share insurance, respectively. 

(s) FAIR HOUSING ACT.—No provision of this title shall be construed as affecting any authority arising under the Fair Housing 

Act. 

* * * * * * * 

(18) 

1 12 U.S.C. § 5517(f)(1) states that ‘‘no provision of this title shall be construed as altering, 

amending, or affecting the authority of any State insurance regulator to adopt rules, initiate 

enforcement proceedings, or take any other action with respect to a person regulated by a State 

insurance regulator.’’ 2 12 U.S.C. § 5517(f)(2). 

3 A ‘‘service provider’’ is defined as any entity that provides a material service to a bank or 

nonbank subject to the supervision of the Consumer Bureau in connection with the provision 

of a financial product or service. 12 U.S.C. §§ 5481(6) and (26). 4 12 U.S.C. § 5517(f)(2). 

5https://www.nytimes.com/2017/07/27/business/wells-fargo-unwanted-auto-insurance.html. 

6 12 U.S.C §§ 5514(e), 5515(d), and § 5516(e); 12 U.S.C. 5517(n). 

MINORITY VIEWS 

Democrats support the state-based system of insurance regulation in the U.S., and believe that the Consumer Financial Protection Bureau’s (Consumer Bureau) powers with respect to insurance 

are clearly and appropriately limited.1 Generally speaking, the 

Consumer Bureau does not have supervisory or enforcement authority over insurance. However, there are very narrow exceptions 

to this general exemption to ensure that there are no loopholes in 

our oversight or our ability to protect consumers. Nevertheless, 

H.R. 3746 would roll back the Consumer Bureau’s already limited 

supervisory and enforcement authority over insurance, effectively 

creating opportunities for regulatory arbitrage and risking consumer harm. 

The Consumer Bureau has supervisory and enforcement authority over insurance companies or persons engaged in the business of 

insurance to the extent that they are engaged in the offering or 

provision of any consumer financial product or service,2 or acting 

as a ‘‘service provider’’ 3 that provides a material service to a bank 

in connection with the offering of a financial product or service.4

This ensures that an insurance company cannot unfairly evade 

scrutiny when a financial institution, or service provider thereof, 

would be subject to Consumer Bureau scrutiny for engaging in the 

same activity. For example, Wells Fargo’s negligent administration 

of its force-placed auto insurance program relied on its partnership 

with National General, an insurance provider.5 Wells Fargo and 

National General were responsible for pushing hundreds of thousands of customers into delinquency or causing them to have their 

car wrongly repossessed. Under current law, the Consumer Bureau 

is authorized to take action against insurance companies like National General that act as bank service providers, but under H.R. 

3746, this authority would be eliminated. 

The Dodd-Frank Act also grants the Consumer Bureau supervisory and enforcement authority over insurance companies to the 

extent that they are ‘‘subject to any enumerated consumer law 

. . .’’ 6 For example, insurance companies are subject to the Real 

Estate Settlement Procedures Act (RESPA), which prohibits any 

person from giving or receiving a fee or kickback as part of a real 

estate settlement. The Consumer Bureau has brought multiple civil 

19 

actions against insurance companies for violating this provision of 

RESPA, particularly in the aftermath of the financial crisis. Under 

H.R. 3746, the Consumer Bureau would no longer be able to bring 

such actions. Insurance companies are also subject to the Truth in 

Lending Act (TILA), the Equal Credit Opportunity Act (ECOA), 

and the Fair Credit Reporting Act (FCRA), but under H.R. 3746, 

insurance companies that violate these important consumer laws 

would be able to evade Consumer Bureau scrutiny. Even though 

state insurance regulators have authority over insurance companies, they cannot bring actions under these federal laws, and it is 

not clear that any other federal agency would have authority to do 

so. 

In sum, H.R. 3746 would substantially scale back the Consumer 

Bureau’s already limited authority over insurance, ultimately leaving consumers at higher risk of fraudulent and abusive practices. 

For these reasons, we oppose H.R. 3746. 

MAXINE WATERS. 

MICHAEL E. CAPUANO. 

CAROLYN B. MALONEY. 

KEITH ELLISON. 

AL GREEN. 

STEPHEN F. LYNCH. 

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