79–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 115–885 

COMMUNITY FINANCIAL INSTITUTION EXEMPTION ACT 

AUGUST 3, 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. 1264] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 1264) to provide an exemption from rules and regulations 

of the Bureau of Consumer Financial protection for community financial institutions, and for other purposes, having considered the 

same, report favorably thereon with amendments and recommend 

that the bill as amended do pass. 

The amendments are as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Community Financial Institution Exemption Act’’. 

SEC. 2. EXEMPTION FOR CERTAIN FINANCIAL INSTITUTIONS. 

Section 1022(b) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 

5512(b)) is amended— 

(1) in paragraph (3), by amending the heading to read as follows: ‘‘GENERAL

EXEMPTIONS’’; 

(2) by redesignating paragraph (4) as paragraph (5); and 

(3) by inserting after paragraph (3) the following: 

‘‘(4) SPECIFIC EXEMPTION FOR CERTAIN FINANCIAL INSTITUTIONS.— 

‘‘(A) IN GENERAL.—An insured depository institution or credit union with 

less than $50,000,000,000 in consolidated assets shall be exempt from all 

rules and regulations issued by the Bureau. 

‘‘(B) EXCEPTION.—The Bureau may revoke an exemption provided under 

subparagraph (A) with respect to a specific rule or regulation and a specific 

class of insured depository institutions or credit unions described in subparagraph (A) if— 

2 

‘‘(i) the Bureau makes a detailed, written finding that such class of 

insured depository institutions or credit unions described in subparagraph (A) has engaged in a pattern or practice of activities that have 

been detrimental to the interests of consumers and are of a type that 

the specific rule or regulation is intended to address; 

‘‘(ii) the Bureau consults with the Federal banking agencies with respect to such revocation; and 

‘‘(iii) each Federal banking agency provides the Bureau with a written notice stating that the Federal banking agency agrees with such 

revocation. 

‘‘(C) EFFECTIVE DATE; EFFECT ON PRIOR RULES.— ‘‘(i) EFFECTIVE DATE.—This paragraph shall take effect with respect 

to rules and regulations issued or modified after the date of enactment 

of this paragraph. 

‘‘(ii) EFFECT ON PRIOR RULES.—This paragraph shall not prohibit the 

Bureau from modifying a rule or regulation issued prior to the date of 

enactment of this paragraph with respect to insured depository institutions or credit unions described in subparagraph (A) if the effect of such 

modification is to expand a current exemption or to reduce the costs 

and the regulatory burden associated with complying with such rule or 

regulation. 

‘‘(D) FEDERAL BANKING AGENCY DEFINED.—For purposes of this paragraph, the term ‘Federal banking agency’ means the Board of Governors, 

the Office of the Comptroller of the Currency, the Corporation, and the National Credit Union Administration.’’. 

Amend the title so as to read: 

A bill to provide an exemption from rules and regulations of the 

Bureau of Consumer Financial Protection for certain financial institutions, and for other purposes. 

PURPOSE AND SUMMARY

Introduced by Representative Roger Williams on February 28, 

2017, H.R. 1264, the ‘‘Community Financial Institution Exemption 

Act’’, amends the Dodd-Frank Wall Street Reform and Consumer 

Protection Act of 2010 [P.L. 111–203] to exempt insured depository 

institutions or credit unions with less than $50 billion in consolidated assets from all rules and regulations issued by the Bureau 

of Consumer Financial Protection (BCFP). Under specified circumstances, and with the written agreement of the Board of Governors of the Federal Reserve System (Federal Reserve) and other 

specified federal banking agencies, the BCFP may revoke such an 

exemption with respect to a certain rule, regulation, or class of institutions. 

BACKGROUND AND NEED FOR LEGISLATION

Title X of the Dodd-Frank Act established the BCFP with a dual 

mandate to enforce federal consumer financial law and ensure that 

consumers have access to financial products and services, and warranting fair, transparent, and competitive markets for such services and products. Under the Dodd-Frank Act, the Bureau can 

issue rules, examine certain institutions, and enforce consumer protection laws and regulations. Under the same authority, the BCFP 

can also exempt, conditionally or unconditionally, covered persons 

from its rules and regulations. 

Although Dodd-Frank’s reforms are purportedly directed primarily at large, complex U.S. financial institutions, the Act’s 

breadth, coupled with the regulatory response from 2010 through 

2016, captured smaller community financial institutions as well. 

These smaller institutions regularly express concerns to the BuVerDate Sep 11 2014 04:53 Aug 07, 2018 Jkt 079006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR885.XXX HR885
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1https://www.federalreserve.gov/newsevents/speech/yellen20171004a.htm. 

2https://www.mercatus.org/publication/how-are-small-banks-faring-under-dodd-frank. 

reau and to Congress about the growing weight and complexity of 

regulation, and never-ending compliance costs, which affects their 

ability to provide the products and services necessary to allow 

small businesses to grow and consumers to access credit to realize 

their financial and personal goals. 

The regulatory burden falls into three major categories: (1) additional operational, legal and auditing costs associated with compliance; (2) restrictions on fees, interest rates, or other revenue; and 

(3) unintentional barriers to offer a product or service because of 

regulatory complexity. 

Dodd-Frank’s complex and expansive regulatory regime has had 

a ‘‘trickle-down effect, where regulation originally meant for big institutions is being applied to smaller banks,’’ often in the form of 

bank examiners identifying those regulations as ‘‘best practices’’ 

that should be followed by institutions regardless of their size. 

Smaller institutions are disproportionately affected by increased 

regulation because they are less able to absorb additional costs. 

The explosive growth of bank regulation following the enactment 

of Dodd-Frank has made it significantly harder for smaller banks 

and credit unions to serve their customers. Community financial 

institutions find that their compliance costs have gone up as they 

attempt to keep up with new regulations and more intrusive examinations. New regulations and higher compliance costs have 

forced small banks and credit unions to cut back on the services 

they offer to their customers. As a result, many consumers have 

found that their local banks can no longer provide them with the 

products and services that they need and want. 

Regulators have acknowledged the validity of these concerns. For 

example, in an October 4, 2017, speech, Federal Reserve Chairwoman Janet Yellen stated: 

The Fed has been working hard to ensure that its regulation and 

supervision of banks are tailored appropriately to the size, complexity and role different institutions play in the financial system 

. . . [f]or community banks, which by and large avoided the risky 

business practices that contributed to the financial crisis, we have 

been focused on making sure that much-needed improvements to 

regulation and supervision since the crisis are appropriate and not 

unduly burdensome[.] 1

These findings are buttressed by a 2014 working paper by the 

Mercatus Center at George Mason University which surveyed ‘‘approximately 200 banks across 41 states with less than $10 billion 

in assets each, serving mostly rural and small metropolitan markets.’’ 2 The authors found that ‘‘Dodd-Frank has proved burdensome to small banks, and customers are seeing the effects of the 

increased regulatory burden through reduced product and service 

offerings as small banks rethink their lines of business and consider consolidation activity.’’ As a result, ‘‘[t]hese customers . . . 

may shift their patronage to larger banks that enjoy competitive 

advantages in managing regulatory costs but are not as conveniently located, do not provide the same level of customer service, 

or do not offer a regionally tailored product mix. Large banks may 

4 

3 Id. 

also not be as willing to serve the customers, such as small businesses and rural populations, which small banks typically serve.’’ 

The Mercatus study also explained how the Dodd-Frank Act’s 

‘‘one-size-fits-all’’ regulatory approach harms small banks and their 

customers: 

‘‘Regulations—such as many of those emerging from 

Dodd-Frank—that encourage or insist on standardization 

of bank products and services can be particularly harmful 

to small banks and their customers. Large banks find it 

profitable to offer standardized products. Small banks tend 

to serve idiosyncratic markets, and they succeed by molding their business models to the economic contours of their 

local communities. A large bank cannot accommodate certain types of customers with its standard products and 

processes. If federal banking regulations require small 

banks to mimic these products and processes, these customers might find that small banks cannot serve them either.’’ 3

The result of a less competitive marketplace, where smaller institutions are overwhelmed by the volume and complexity of regulations and are forced to exit business lines or seek to merge with 

other institutions, is fewer and more expensive borrowing choices 

for consumers and small businesses—particularly for those economically disadvantaged groups that have historically had the 

most difficulty to access credit. 

By exempting institutions with less than $50 billion in total consolidated assets from the Bureau’s current and future rules and 

regulations, H.R. 1264 appropriately refines Dodd-Frank’s breadth 

and interpretation by aggressive regulators and replaces it with a 

regulatory regime that recognizes that small, non-threatening, community-based financial institutions did not cause the financial crisis, and are fundamentally incapable of inflicting harm relative to 

the onerous regulations exacted upon them. The exemption provided by H.R. 1264 does not exempt these institutions from all prudential regulation. The Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation 

or the National Credit Union Administration would continue to 

issue regulations, examine, and enforce the consumer finance laws 

for institutions that H.R. 1264 would exempt from the Bureau’s direct oversight. There are approximately 38 banks with total consolidated assets of $50 billion or greater. Approximately four of 

those 38 are traditional banks, meaning that they do not engage 

in a wider range of nonbank financial activities that could present 

risk. Therefore, approximately 5,700 banks with less than $50 billion in assets, and the consumers they serve, would directly benefit 

from this exemption. 

HEARINGS

The Committee on Financial Services held a hearing examining 

matters relating to H.R. 1264 on January 9, 2018. 

5 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

January 18, 2018, and ordered H.R. 1264 to be reported favorably 

to the as amended by a recorded vote of 30 yeas to 25 nays (recorded vote no. FC–137), a quorum being present. Before the motion to report was offered, the Committee adopted an amendment 

in the nature of a substitute offered by Mr. Williams by voice vote. 

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 as amended. The motion was agreed to by a recorded 

vote of 30 yeas to 25 nays (Record vote no. FC–137), a quorum 

being present. 

6 


Insert offset folio 7 here HR885.001

Record vote no. FC-137 

----~R~ep~r~es~er~lt~at~,v~e ______ Y~e~a--~Na~y--~P~re~se~nt~----~R~ep~re~se~.n~ta~ti~ve ----~Y~ea~~~~~~ 

Mr. Hensarlrng _ _ _ ~ Ms. Maxine Waters (CAl _ 

Mr. McHenry_________________ Mrs. Carolyn B. Maloney (NY) __ 

Mr. King_____________ Ms. Velazquez_ 

Mr. Royce (CAl _ ~ Mr. Sherman _ 

Mr. Lucas _____________ _ 

Mr. Pearce 

Mr. Posey_ _ ____________ _ 

Mr. Luetkemeyer ____________ _ 

Mr. Huizenga _______________ _ 

Mr. Dully _ 

Mr. Stivers _________________ __ 

Mr. Hultgren ____________ _ 

Mr. Ross 

Mr. Pittenger 

Mrs. Wagner 

Mr. Barr 

Mr. Rotnfus 

Mr. Messer 

Mr. Tipton _______________ _ 

Mr. Wiiliams ________________ _ 

Mr. Poliqu1n _ 

Mrs. Love 

Mr. Hill_ 

Mr. Emmer 

Mr. Zeldin 

Mr. Trott 

Mr. Loudermilk 

Mr. Mooney (WV) 

Mr. MacArtlllrr 

Mr. Davidson 

Mr. Budd 

Mr. Kustoff {TN) _ 

Ms. Tenney ____________ _ 

Mr. Hollrngsworth _____ _ 

~ 

X 

X 

~ 

X 

X 

Mr. Meeks _ 

Mr. Capuano __ 

Mr. Clay_ 

Mr. Lynch _________ _ 

Mr. David Scott (GA) ____ _ 

Mr. AI Green (TX) _________ _ 

Mr. Cleaver _____________ _ 

Ms. Moore 

Mr. Ellison ______________ -

Mr. Perlmutter 

Mr. Himes 

Mr. Foster _______ ------------

Mr. Kildee _ _ _________ _ 

Mr. De 1aney 

Ms. Sinema 

Mrs. Beatty ______________ _ 

Mr Heck_ -------~----------­

Mr. Vargas 

Mr. Gottheimer _ 

Mr. Gonzalez (TX) __ 

Mr. C11st __ _ 

Mr. Kihuen 
7 

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. 1264 will allow 

for small financial institutions with consolidated assets under $50 

billion to more adequately provide reasonably priced financial services and products to the general public without having to abide by 

BCFP regulations and rules that were intended for significantly 

bigger institutions. 

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, May 11, 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. 1264, the Community Financial Institution Exemption Act. 

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. 1264—Community Financial Institution Exemption Act 

The Consumer Financial Protection Bureau (CFPB) enforces federal consumer financial protection laws but may exempt classes of 

institutions, service providers, or consumer financial products or 

services from its rules. 

8 

H.R. 1264 would require the CFPB to exempt insured depository 

institutions and credit unions with less than $50 billion in assets 

from all rules and regulations the agency issues or modifies after 

the date of the bill’s enactment. The bill would authorize CFPB to 

revoke the exemption from a specific rule for a specific class of institutions under certain circumstances. The agency also could modify existing rules and regulations for insured depository institutions 

and credit unions with less than $50 billion in assets if the modification would expand a current exemption or reduce the cost and 

regulatory burden of compliance. 

Using information from the CFPB, CBO estimates that enacting 

H.R. 1264 would require the equivalent of one additional employee 

to expand the CBPB’s current analyses of the effects of new or 

modified rules and regulations. Assuming the CFPB hired an additional employee to do that work the bill would increase direct 

spending by $2 million over the 2019–2028 period. Because enacting H.R. 1264 could affect direct spending, pay-as-you-go procedures apply. Enacting the bill would not affect revenues. 

CBO estimates that enacting H.R. 1264 would not increase net 

direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2029. 

H.R. 1264 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 reviewed 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. 

9 

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 rule makings: The 

Committee estimates that the bill requires no directed rule makings within the meaning of such section. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This section cites H.R. 1264 as the ‘‘Community Financial Institutions Exemption Act’’. 

Section 2. Exemption for certain financial institutions 

This section amends Section 1022(b) of the Dodd-Frank Wall 

Street Reform and Consumer Protection Act of 2010 (12 U.S.C. 

5512(b)) by providing for insured depository institution or credit 

union with less than $50 billion in consolidated assets to be exempt 

from all rules and regulations issued by the Bureau. The Bureau 

may revoke an exemption for an institution with less than $50 billion in assets or a specific rule if the Bureau finds an institution 

has engaged in a pattern of activity that is detrimental to the interest of consumers. Exemption revocation requires the appropriate 

federal banking agency to agree with the Bureau’s findings. 

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 italic, 

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

roman): 

10 

CONSUMER FINANCIAL PROTECTION ACT OF 2010 

* * * * * * * 

TITLE X—BUREAU OF CONSUMER 

FINANCIAL PROTECTION 

* * * * * * * 

Subtitle B—General Powers of the Bureau 

* * * * * * * 

SEC. 1022. RULEMAKING AUTHORITY. 

(a) IN GENERAL.—The Bureau is authorized to exercise its authorities under Federal consumer financial law to administer, enforce, and otherwise implement the provisions of Federal consumer 

financial law. 

(b) RULEMAKING, ORDERS, AND GUIDANCE.— (1) GENERAL AUTHORITY.—The Director may prescribe rules 

and issue orders and guidance, as may be necessary or appropriate to enable the Bureau to administer and carry out the 

purposes and objectives of the Federal consumer financial 

laws, and to prevent evasions thereof. 

(2) STANDARDS FOR RULEMAKING.—In prescribing a rule 

under the Federal consumer financial laws— 

(A) the Bureau shall consider— 

(i) the potential benefits and costs to consumers and 

covered persons, including the potential reduction of 

access by consumers to consumer financial products or 

services resulting from such rule; and 

(ii) the impact of proposed rules on covered persons, 

as described in section 1026, and the impact on consumers in rural areas; 

(B) the Bureau shall consult with the appropriate prudential regulators or other Federal agencies prior to proposing a rule and during the comment process regarding 

consistency with prudential, market, or systemic objectives 

administered by such agencies; and 

(C) if, during the consultation process described in subparagraph (B), a prudential regulator provides the Bureau 

with a written objection to the proposed rule of the Bureau 

or a portion thereof, the Bureau shall include in the adopting release a description of the objection and the basis for 

the Bureau decision, if any, regarding such objection, except that nothing in this clause shall be construed as altering or limiting the procedures under section 1023 that may 

apply to any rule prescribed by the Bureau. 

(3) øEXEMPTIONS.—¿ GENERAL EXEMPTIONS.— 

(A) IN GENERAL.—The Bureau, by rule, may conditionally or unconditionally exempt any class of covered 

persons, service providers, or consumer financial products 

or services, from any provision of this title, or from any 

rule issued under this title, as the Bureau determines necVerDate Sep 11 2014 04:53 Aug 07, 2018 Jkt 079006 PO 00000 Frm 00010 Fmt 6659 Sfmt 6602 E:\HR\OC\HR885.XXX HR885
11 

essary or appropriate to carry out the purposes and objectives of this title, taking into consideration the factors in 

subparagraph (B). 

(B) FACTORS.—In issuing an exemption, as permitted 

under subparagraph (A), the Bureau shall, as appropriate, 

take into consideration— 

(i) the total assets of the class of covered persons; 

(ii) the volume of transactions involving consumer financial products or services in which the class of covered persons engages; and 

(iii) existing provisions of law which are applicable 

to the consumer financial product or service and the 

extent to which such provisions provide consumers 

with adequate protections. 

(4) SPECIFIC EXEMPTION FOR CERTAIN FINANCIAL INSTITUTIONS.— 

(A) IN GENERAL.—An insured depository institution or 

credit union with less than $50,000,000,000 in consolidated 

assets shall be exempt from all rules and regulations issued 

by the Bureau. 

(B) EXCEPTION.—The Bureau may revoke an exemption 

provided under subparagraph (A) with respect to a specific 

rule or regulation and a specific class of insured depository 

institutions or credit unions described in subparagraph (A) 

if— 

(i) the Bureau makes a detailed, written finding that 

such class of insured depository institutions or credit 

unions described in subparagraph (A) has engaged in 

a pattern or practice of activities that have been detrimental to the interests of consumers and are of a type 

that the specific rule or regulation is intended to address; 

(ii) the Bureau consults with the Federal banking 

agencies with respect to such revocation; and 

(iii) each Federal banking agency provides the Bureau with a written notice stating that the Federal 

banking agency agrees with such revocation. 

(C) EFFECTIVE DATE; EFFECT ON PRIOR RULES.— (i) EFFECTIVE DATE.—This paragraph shall take effect with respect to rules and regulations issued or 

modified after the date of enactment of this paragraph. 

(ii) EFFECT ON PRIOR RULES.—This paragraph shall 

not prohibit the Bureau from modifying a rule or regulation issued prior to the date of enactment of this 

paragraph with respect to insured depository institutions or credit unions described in subparagraph (A) if 

the effect of such modification is to expand a current 

exemption or to reduce the costs and the regulatory 

burden associated with complying with such rule or 

regulation. 

(D) FEDERAL BANKING AGENCY DEFINED.—For purposes of 

this paragraph, the term ‘‘Federal banking agency’’ means 

the Board of Governors, the Office of the Comptroller of the 

Currency, the Corporation, and the National Credit Union 

Administration. 

12 

ø(4)¿ (5) EXCLUSIVE RULEMAKING AUTHORITY.— (A) IN GENERAL.—Notwithstanding any other provisions 

of Federal law and except as provided in section 

1061(b)(5), to the extent that a provision of Federal consumer financial law authorizes the Bureau and another 

Federal agency to issue regulations under that provision of 

law for purposes of assuring compliance with Federal consumer financial law and any regulations thereunder, the 

Bureau shall have the exclusive authority to prescribe 

rules subject to those provisions of law. 

(B) DEFERENCE.—Notwithstanding any power granted to 

any Federal agency or to the Council under this title, and 

subject to section 1061(b)(5)(E), the deference that a court 

affords to the Bureau with respect to a determination by 

the Bureau regarding the meaning or interpretation of any 

provision of a Federal consumer financial law shall be applied as if the Bureau were the only agency authorized to 

apply, enforce, interpret, or administer the provisions of 

such Federal consumer financial law. 

(c) MONITORING.— 

(1) IN GENERAL.—In order to support its rulemaking and 

other functions, the Bureau shall monitor for risks to consumers in the offering or provision of consumer financial products or services, including developments in markets for such 

products or services. 

(2) CONSIDERATIONS.—In allocating its resources to perform 

the monitoring required by this section, the Bureau may consider, among other factors— 

(A) likely risks and costs to consumers associated with 

buying or using a type of consumer financial product or 

service; 

(B) understanding by consumers of the risks of a type of 

consumer financial product or service; 

(C) the legal protections applicable to the offering or provision of a consumer financial product or service, including 

the extent to which the law is likely to adequately protect 

consumers; 

(D) rates of growth in the offering or provision of a consumer financial product or service; 

(E) the extent, if any, to which the risks of a consumer 

financial product or service may disproportionately affect 

traditionally underserved consumers; or 

(F) the types, number, and other pertinent characteristics of covered persons that offer or provide the consumer 

financial product or service. 

(3) SIGNIFICANT FINDINGS.— 

(A) IN GENERAL.—The Bureau shall publish not fewer 

than 1 report of significant findings of its monitoring required by this subsection in each calendar year, beginning 

with the first calendar year that begins at least 1 year 

after the designated transfer date. 

(B) CONFIDENTIAL INFORMATION.—The Bureau may 

make public such information obtained by the Bureau 

under this section as is in the public interest, through aggregated reports or other appropriate formats designed to 

13 

protect confidential information in accordance with paragraphs (4), (6), (8), and (9). 

(4) COLLECTION OF INFORMATION.— 

(A) IN GENERAL.—In conducting any monitoring or assessment required by this section, the Bureau shall have 

the authority to gather information from time to time regarding the organization, business conduct, markets, and 

activities of covered persons and service providers. 

(B) METHODOLOGY.—In order to gather information described in subparagraph (A), the Bureau may— 

(i) gather and compile information from a variety of 

sources, including examination reports concerning covered persons or service providers, consumer complaints, voluntary surveys and voluntary interviews of 

consumers, surveys and interviews with covered persons and service providers, and review of available 

databases; and 

(ii) require covered persons and service providers 

participating in consumer financial services markets 

to file with the Bureau, under oath or otherwise, in 

such form and within such reasonable period of time 

as the Bureau may prescribe by rule or order, annual 

or special reports, or answers in writing to specific 

questions, furnishing information described in paragraph (4), as necessary for the Bureau to fulfill the 

monitoring, assessment, and reporting responsibilities 

imposed by Congress. 

(C) LIMITATION.—The Bureau may not use its authorities under this paragraph to obtain records from covered 

persons and service providers participating in consumer financial services markets for purposes of gathering or analyzing the personally identifiable financial information of 

consumers. 

(5) LIMITED INFORMATION GATHERING.—In order to assess 

whether a nondepository is a covered person, as defined in section 1002, the Bureau may require such nondepository to file 

with the Bureau, under oath or otherwise, in such form and 

within such reasonable period of time as the Bureau may prescribe by rule or order, annual or special reports, or answers 

in writing to specific questions. 

(6) CONFIDENTIALITY RULES.— 

(A) RULEMAKING.—The Bureau shall prescribe rules regarding the confidential treatment of information obtained 

from persons in connection with the exercise of its authorities under Federal consumer financial law. 

(B) ACCESS BY THE BUREAU TO REPORTS OF OTHER REGULATORS.— 

(i) EXAMINATION AND FINANCIAL CONDITION REPORTS.—Upon providing reasonable assurances of confidentiality, the Bureau shall have access to any report 

of examination or financial condition made by a prudential regulator or other Federal agency having jurisdiction over a covered person or service provider, and 

to all revisions made to any such report. 

14 

(ii) PROVISION OF OTHER REPORTS TO THE BUREAU.— In addition to the reports described in clause (i), a 

prudential regulator or other Federal agency having 

jurisdiction over a covered person or service provider 

may, in its discretion, furnish to the Bureau any other 

report or other confidential supervisory information 

concerning any insured depository institution, credit 

union, or other entity examined by such agency under 

authority of any provision of Federal law. 

(C) ACCESS BY OTHER REGULATORS TO REPORTS OF THE

BUREAU.— 

(i) EXAMINATION REPORTS.—Upon providing reasonable assurances of confidentiality, a prudential regulator, a State regulator, or any other Federal agency 

having jurisdiction over a covered person or service 

provider shall have access to any report of examination made by the Bureau with respect to such person, 

and to all revisions made to any such report. 

(ii) PROVISION OF OTHER REPORTS TO OTHER REGULATORS.—In addition to the reports described in clause 

(i), the Bureau may, in its discretion, furnish to a prudential regulator or other agency having jurisdiction 

over a covered person or service provider any other report or other confidential supervisory information concerning such person examined by the Bureau under 

the authority of any other provision of Federal law. 

(7) REGISTRATION.— (A) IN GENERAL.—The Bureau may prescribe rules regarding registration requirements applicable to a covered 

person, other than an insured depository institution, insured credit union, or related person. 

(B) REGISTRATION INFORMATION.—Subject to rules prescribed by the Bureau, the Bureau may publicly disclose 

registration information to facilitate the ability of consumers to identify covered persons that are registered with 

the Bureau. 

(C) CONSULTATION WITH STATE AGENCIES.—In developing 

and implementing registration requirements under this 

paragraph, the Bureau shall consult with State agencies 

regarding requirements or systems (including coordinated 

or combined systems for registration), where appropriate. 

(8) PRIVACY CONSIDERATIONS.—In collecting information from 

any person, publicly releasing information held by the Bureau, 

or requiring covered persons to publicly report information, the 

Bureau shall take steps to ensure that proprietary, personal, 

or confidential consumer information that is protected from 

public disclosure under section 552(b) or 552a of title 5, United 

States Code, or any other provision of law, is not made public 

under this title. 

(9) CONSUMER PRIVACY.— (A) IN GENERAL.—The Bureau may not obtain from a 

covered person or service provider any personally identifiable financial information about a consumer from the financial records of the covered person or service provider, 

except— 

15 

(i) if the financial records are reasonably described 

in a request by the Bureau and the consumer provides 

written permission for the disclosure of such information by the covered person or service provider to the 

Bureau; or 

(ii) as may be specifically permitted or required 

under other applicable provisions of law and in accordance with the Right to Financial Privacy Act of 1978 

(12 U.S.C. 3401 et seq.). 

(B) TREATMENT OF COVERED PERSON OR SERVICE PRO- VIDER.—With respect to the application of any provision of 

the Right to Financial Privacy Act of 1978, to a disclosure 

by a covered person or service provider subject to this subsection, the covered person or service provider shall be 

treated as if it were a ‘‘financial institution’’, as defined in 

section 1101 of that Act (12 U.S.C. 3401). 

(d) ASSESSMENT OF SIGNIFICANT RULES.— 

(1) IN GENERAL.—The Bureau shall conduct an assessment of 

each significant rule or order adopted by the Bureau under 

Federal consumer financial law. The assessment shall address, 

among other relevant factors, the effectiveness of the rule or 

order in meeting the purposes and objectives of this title and 

the specific goals stated by the Bureau. The assessment shall 

reflect available evidence and any data that the Bureau reasonably may collect. 

(2) REPORTS.—The Bureau shall publish a report of its assessment under this subsection not later than 5 years after the 

effective date of the subject rule or order. 

(3) PUBLIC COMMENT REQUIRED.—Before publishing a report 

of its assessment, the Bureau shall invite public comment on 

recommendations for modifying, expanding, or eliminating the 

newly adopted significant rule or order. 

* * * * * * * 

(16) 

1 12 U.S.C. § 5512 (2010) ‘‘The [Consumer Bureau] may conditionally or unconditionally exempt any class of covered persons, service providers, or consumer financial products or services, 

from any provision of this title, or from any rule issued under this title, as the Bureau determines necessary or appropriate to carry out the purposes and objectives of this title.’’ 

MINORITY VIEWS 

H.R. 1264 would exempt depository institutions with less than 

$50 billion in assets, or over 99 percent of all banks and credit 

unions, from any new or modified consumer protection regulation 

issued by the Consumer Financial Protection Bureau (‘‘Consumer 

Bureau’’). Only under extremely limited circumstances, and with 

the written approval of all other federal prudential banking regulators—the Board of Governors of the Federal Reserve System 

(‘‘Federal Reserve Board’’), the Federal Deposit Insurance Corporation (‘‘FDIC’’), the Office of the Comptroller of the Currency 

(‘‘OCC’’), and the National Credit Union Administration 

(‘‘NCUA’’)—would the Consumer Bureau be able to revoke the exemption for a class of institutions with respect to a specific consumer protection regulation. 

Section 1022 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (‘‘Dodd-Frank Act’’) established the Consumer 

Bureau, and granted it rulemaking authority for over 20 major federal consumer financial protection laws, including the Equal Credit 

Opportunity Act, the Truth In Lending Act, and the Fair Credit Reporting Act. The same section of the Dodd-Frank Act also provides 

the Consumer Bureau with discretion to tailor its rulemaking for 

smaller, rural, and community financial institutions.1 The Consumer Bureau has repeatedly exercised this authority to provide 

targeted regulatory relief when it is warranted. For example, the 

Consumer Bureau tailored its Ability-to-Repay and Qualified Mortgage Standards to provide carve-outs for small creditors in rural 

and underserved areas. 

However, H.R. 1264 would override the Dodd-Frank Act and take 

the unprecedented step of exempting all banks and credit unions 

with less than $50 billion in total assets from any updated or new 

federal consumer financial protection regulations. Nearly all of the 

nation’s banks, and all but one credit union, would fall under the 

bill’s exemption. The bill would provide a narrow exception to allow 

the Consumer Bureau to apply, or re-apply, a federal consumer financial protection regulation to some or all of these institutions, 

but only if the institution ‘‘has engaged in a pattern or practice of 

activities that have been detrimental to the interests of consumers 

and are of a type that the specific rule or regulation is intended 

to address,’’ and the application is approved by the Federal Reserve 

Board, FDIC, OCC and NCUA. If a single regulator vetoed the action, the depository institutions would continue to be exempt from 

the rule. 

17 

Furthermore, the bill only adds to the extensive constraints that 

the Consumer Bureau’s rulemaking authority is already subject to. 

Specifically, the Dodd-Frank Act establishes procedures that the 

Consumer Bureau must follow when proposing and prescribing 

rules, in addition to the notice of proposed rulemaking and comment period procedures required for informal rulemakings under 

the Administrative Procedure Act and other generally applicable 

federal administrative laws. For example, before proposing a rule 

as well as during the comment period of a proposed rule, the Consumer Bureau must consult with other appropriate financial regulators, and address any written objections by federal prudential 

banking regulators. 

At a time when banks are experiencing record growth and profitability and the Executive Branch has taken illegal actions to subvert the Consumer Bureau, this measure would further weaken 

oversight for consumer protection laws and regulations for almost 

all of our nation’s banks. The Consumer Bureau is the only federal 

agency solely responsible for consumer protection in the financial 

sector, and this legislative proposal would severely hamper its ability to carry out its mission. H.R. 1264 impedes the Consumer Bureau’s authority to protect consumers and regulate the banking industry. In no way can this be described as a targeted and reasonable approach. 

For these reasons, we oppose H.R. 1264. 

MAXINE WATERS. 

NYDIA M. VELA ́ ZQUEZ. 

CAROLYN B. MALONEY. 

JOYCE BEATTY. 

KEITH ELLISON. 

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