I 
114TH CONGRESS 
2D SESSION 
H. R. 4737 
To protect State and Tribal sovereignty from unwarranted infringement by 
an independent agency of the Federal Government by requiring the 
Bureau of Consumer Financial Protection to justify certain proposals 
to preempt State and Tribal law, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 14, 2016 
Mr. MULVANEY introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To protect State and Tribal sovereignty from unwarranted 
infringement by an independent agency of the Federal 
Government by requiring the Bureau of Consumer Fi-
nancial Protection to justify certain proposals to preempt 
State and Tribal law, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘State and Tribal Gov-
ernment Sovereignty Protection Act of 2016’’. 
SEC. 2. FINDINGS. 
The Congress finds the following: 
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(1) The people of the States created the na-
tional government when they delegated to it those 
enumerated governmental powers relating to matters 
beyond the competence of the individual States. All 
other sovereign powers, save those expressly prohib-
ited the States by the Constitution, are reserved to 
the States or the people. 
(2) In most areas of governmental concern, the 
States uniquely possess the constitutional authority, 
the resources, and the competence to discern the 
sentiments of the people and to govern accordingly. 
(3) Our constitutional system encourages a 
healthy diversity in the public policies adopted by 
the people of the several States according to their 
own conditions, needs, and desires. Individual States 
and communities are free to experiment with a vari-
ety of approaches to public issues. One-size-fits-all 
approaches to public policy problems can inhibit the 
creation of effective solutions to problems. 
(4) Federal action limiting the policymaking 
discretion of the States should be taken only where 
constitutional and statutory authority for the action 
is clear and certain and the national activity is ne-
cessitated by the presence of a problem of national 
scope. 
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(5) Federal agencies must recognize the distinc-
tion between problems of national scope (which may 
justify Federal action) and problems that are merely 
common to the States (which will not justify Federal 
action because individual States, acting individually 
or together, can effectively deal with them). 
(6) On March 26, 2015, the Bureau of Con-
sumer Financial Protection released an outline of 
proposals 
under 
consideration 
for 
potential 
rulemakings for ‘‘payday, vehicle title, and similar 
loans’’. 
(7) The Bureau acknowledged that ‘‘markets 
for payday, vehicle title, and similar loans are regu-
lated by a variety of state laws, as well as some trib-
al and municipal laws’’. The Bureau specifically ac-
knowledged that ‘‘Some jurisdictions have imposed 
usury limits that prohibit lenders from offering high- 
cost credit. In other jurisdictions, certain products 
are specifically authorized by state laws, often craft-
ed as exceptions to general state credit regulation, 
including consumer loan laws and general usury lim-
its. Some of the states authorizing these products 
have sought to regulate loan structures and lender 
practices in a variety of ways, including limiting per-
missible costs, restricting reborrowing in certain cir-
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cumstances, or setting a maximum ratio for the 
amount of debt on such loans to gross monthly in-
come. States, tribes, and local governments also im-
pose a variety of licensure requirements on lenders 
engaged in payday and vehicle title lending.’’. This 
variation in State, local, and tribal law suggests a 
healthy, dynamic, legal environment in which the 
democratically elected representatives in each juris-
diction respond appropriately to the particular condi-
tions, needs, and desires of their constituents. 
(8) Notwithstanding the foregoing, the Director 
of the Bureau seeks to ‘‘establish a federal floor for 
consumer protection for covered loans’’, thus sub-
stituting the Director’s own judgment for that of 
State, tribal, and local governments. 
(9) The Bureau made no showing that any 
State or tribal government lacks the legal authority 
to enact laws or regulations that are substantially 
similar to the Bureau’s outline of proposals. 
(10) The Bureau made no showing that any 
State or tribal government is incapable of protecting 
its citizens from potential risks associated with using 
payday, vehicle title, and similar loans. 
(11) The Bureau’s proposals, if implemented, 
would be an unwarranted infringement of State and 
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tribal sovereignty and a violation of fundamental 
federalist principles designed to secure the liberty of 
the American people. 
SEC. 3. MORATORIUM. 
(a) PROHIBITION
ON PAYDAY LOANS, VEHICLE 
TITLE LOANS, AND OTHER SIMILAR LOAN REGULA-
TIONS.—The Bureau of Consumer Financial Protection 
may not issue or enforce any rule or regulation with re-
spect to payday loans, vehicle title loans, or other similar 
loans during the 24-month period beginning on the date 
of enactment of this Act. 
(b) PAYDAY LOAN.—For purposes of this section the 
term ‘‘payday loan’’ means a loan described under section 
1024(a)(1)(E) of the Consumer Financial Protection Act 
of 2010 (12 U.S.C. 5514(a)(1)(E)). 
SEC. 4. PROTECTING STATE AND TRIBAL GOVERNMENT 
SOVEREIGNTY. 
Section 1022(b) of the Consumer Financial Protec-
tion Act of 2010 (12 U.S.C. 5512(b)) is amended by add-
ing at the end the following: 
‘‘(5) PROTECTING STATE AND TRIBAL GOVERN-
MENT
SOVEREIGNTY
WITH
RESPECT
TO
PAYDAY 
LOANS, VEHICLE TITLE LOANS, AND OTHER SIMILAR 
LOANS.— 
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‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of law, the Bureau may not 
issue any final rule or regulation to regulate 
payday loans, vehicle title loans, or other simi-
lar loans, unless the Bureau first— 
‘‘(i) consults with appropriate State, 
tribal, and local officials in each jurisdic-
tion that may be affected by the rule re-
garding the effect of the rule on State, 
tribal, or local sovereignty, laws, regula-
tions, and citizens; 
‘‘(ii) carries out a study that— 
‘‘(I) examines the Bureau’s con-
stitutional and statutory authority to 
preempt State, tribal, and local laws 
and regulations; 
‘‘(II) examines the effect the rule 
or regulation will have on the laws 
and regulations of individual States, 
federally recognized Indian tribes, and 
municipalities; and 
‘‘(III) identifies alternative pro-
posals to mitigate potential risks asso-
ciated with using payday loans, vehicle 
title loans, and other similar loans 
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without infringing upon State and 
tribal sovereignty or preempting State 
and tribal laws and regulations; and 
‘‘(iii) issues a public report that— 
‘‘(I) contains all findings and de-
terminations made by the Bureau in 
carrying out such study; 
‘‘(II) addresses all comments and 
advice received during consultation 
with State, tribal, and local officials; 
‘‘(III) lists each State, tribal, or 
local law and regulation (or any por-
tion thereof) the Bureau proposes to 
preempt by rule or regulation; 
‘‘(IV) identifies by name any 
State or federally recognized Indian 
tribe that lacks the legal authority to 
enact laws or regulations that are 
substantially similar to the rule or 
regulation, and states the basis for 
why the Bureau has determined that 
the State or federally recognized In-
dian tribe lacks such authority; and 
‘‘(V) identifies by name any 
State or federally recognized Indian 
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