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» VISIT US ONLINE @ DSNEWS.COM 11 BIPARTISAN BILL INTRODUCED IN CONGRESS AIMED AT PREVENTING FED BAILOUTS ree weeks after a bipartisan bill was introduced in the U.S. Senate to limit the Federal Reserve's authority to bail out big banks, similar bipartisan legislation was introduced in the U.S. House of Representatives, according to an announcement on Rep. Scott Garrett's (R-New Jersey) website. Garrett and Mike Capuano (D-Massachu- setts) introduced H.R. 2625, also known as the Bailout Prevention Act (BPA) of 2015, in re- sponse to the Fed's perceived failure to make any meaningful changes with regards to implement- ing certain provisions of Dodd-Frank that would limit the Fed's broad powers. e BPA would prohibit the Fed from lending to insolvent financial institutions; require a "penalty rate" for borrowers that are using a lending facility under Section 13(3) of the Federal Reserve Act, which was the basis for the Fed to bail out some of the nation's largest financial institutions that were deemed by the government as "too big to fail" with trillions in low-cost loans; establish criteria for determining if a lending facility is broad based (facilities under Section 13(3) are required to have a minimum of five borrowers); require congressional approval for those facilities that are not considered broad based under the new criteria; and make reports available to the public in a timely manner (within 60 days). "Amidst the financial crisis of 2008, we witnessed the worst kinds of government cronyism when huge financial institutions were bailed out through section 13(3) of the Federal Reserve Act without much prudence or oversight," Garrett said. "While Dodd-Frank promised to end the cycle of 'too big to fail,' all it did was codify this unfair practice into law and put the American taxpayers on the hook for untold billions—or even trillions—of dollars. I'm happy to introduce this bill with Rep. Capuano to implement the systemic changes and congressional oversight needed to ensure that the notoriously opaque Federal Reserve is held accountable to our constituents." e bill introduced in the Senate back in May, also called the Bailout Prevention Act, was sponsored by Elizabeth Warren (D-Massachusetts) and David Vitter (R-Louisiana). "America's largest financial institutions received unprecedented assistance from the Federal Reserve during the crisis, much of it unknown to the Congress or public at the time," Capuano said. "While the Dodd-Frank Act brought some reforms, the perception lingers that some financial institutions are simply too big to fail and could be bailed out again. is perception has consequences favoring the biggest players in the financial system. We may not know today what the next crisis will look like, but we all have a right to know the full extent of measures that may be taken to prevent a crisis. is legislation will help protect taxpayer dollars by increasing oversight of the Federal Reserve's emergency lending powers and bringing much needed transparency to the process." GEORGIA LAWMAKER PROPOSES BILL TO MAKE CFPB ACCOUNTABLE TO CONGRESS U.S. Senator David Perdue (R-Georgia) has introduced a bill that would make the Consumer Financial Protection Bureau (CFPB) more accountable by bringing it under the Congressional appropriations process, according to an announcement on Perdue's website. Perdue said the Consumer Financial Protection Bureau Accountability Act of 2015 will provide critical Congressional oversight for a Bureau that is funded by the Federal Reserve but is led by a single director rather than a board of directors and is not accountable to Congress. e CFPB was created in 2011 out of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Since then, the Bureau has handed down several multimillion and even billion dollar fines and penalties to agencies, firms, and companies that it believes has engaged in predatory financial practices, including many against mortgage lenders and servicers. e Bureau has been the subject of much controversy, with those in opposition claiming that the Bureau's actions are overreaching. "e Consumer Financial Protection Bureau was spawned from the disastrous Dodd- Frank financial regulation law," Perdue said. "Georgians sent me to Washington to help restore accountability and transparency to the federal government, and the CFPB needs a major dose of both. Right now, the CFPB is a rogue agency that dishes out malicious financial policy and creates new rules and regulations at whim without real Congressional oversight. e American people, through Congress, deserve a closer look at the CFPB and how its actions will impact consumers." Dodd-Frank established a budget of up to 12 percent of the Fed's annual operating expense for the CFPB, which amounts to approximately $600 million with no oversight from Congress on the amount the Bureau is spending. "Additionally, the agency itself has failed to operate within its own budget and proven it is more concerned with preserving its own power than protecting the public," Perdue said. "Ultimately, I believe the CFPB should be eliminated, but an important first step is bringing it into the light for the American people." Perdue's proposal is gaining support among consumer and taxpayer advocacy groups, according to the Senator's website. "e CFPB represents the greatest threat to consumer choice and freedom this country has seen in a long time," said Sarah Makin on behalf of the U.S. Consumer Coalition. "With the enforcement authority of the DOJ, and the regulatory authority of the FDIC, this unaccountable agency has limitless power to impact the lives of Americans. While there may be a role for the CFPB, we applaud Senator Perdue for working to protect consumers from the so-called consumer protector." Republicans promised they would take aim at Dodd-Frank and in particular the CFPB when they gained a majority in both the Senate and the House back in November. U.S. Representative Sean Duffy (R-Wisconsin) introduced a comprehensive CFPB reform package in March that included a proposal (H.R. 1261) similar to the one introduced by Perdue in the Senate. ough Democrats have vowed to fight efforts to reform the CFPB, one of Duffy's proposals, the Bureau Advisory Commission Transparency Act, passed in the House by a 401 to 2 vote in mid-April. In February, Representatives Steve Stivers (R-Ohio) and Tim Walz (D-Minnesota) revived a bipartisan bill that would create an independent Inspector General for the CFPB that is appointed by the President and approved by the Senate. e Bureau currently shares an IG with the Federal Reserve, a position that is appointed by the Fed chair and not subject to Senate approval.

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