Why Did These 60 House Democrats Just Vote to Weaken the Consumer Financial Protection Bureau?

The Consumer Financial Protection Bureau has spent the past few weeks awash in controversy and uncertainty with its “case of two popes.”

Trump’s CFPB pick Mick Mulvaney is preparing to gut the agency, a bete noire of Republicans because it seeks to protect consumers from the predatory practices commonly found among Republican donors.

But this week, the House of Representatives decided to get in on the action, too, by voting to roll back essential consumer protections.

The bill in question, the Community Institution Mortgage Relief Act, would extend to larger banks and non-banks two Consumer Financial Protection Bureau exemptions that currently apply to community banks. Rather than opening up new lines of credit and promoting homeownership, the bill would increase the risk of another financial crisis like that of 2007–2009.

Under current CFPB rules, banks with less than $2 billion in assets are exempt from the requirement to establish escrow accounts for higher-priced mortgage loans, i.e., loans with higher interest rates reflective of riskier or subprime borrowers. Banks with assets less than $2 billion are considered “relationship” bankers as opposed to “transactional” bankers because, at that level, they have specialized knowledge of the community where they do business. The Republican bill would raise this exemption all the way to $25 billion. Those aren’t community banks anymore.

Escrow accounts are important because they can guarantee the timely payment of property-tax bills and insurance premiums, protecting both lender and borrower. The lack of escrow accounts for subprime was a major factor in the subprime mortgage crisis.

The second exemption the bill expands is the “small servicer exemption.” Currently, mortgage service companies that serve up to 5,000 mortgage loans are exempt from some rigorous rules and notification requirements that larger servicers must follow — for example, those related to how they provide billing statements and contact homeowners about their mortgages. Under the new bill, this exemption would apply to service companies that service up to 30,000 mortgage loans. The current rule exists because larger servicers, especially those that serviced loans they did own, often failed to properly communicate with customers or track paperwork. Raising this threshold would open the door for more of such predatory lending practices.

In other words, a vote for this bill was a vote to make another financial crisis more likely and to open the floodgates to predatory lending.

It passed 294 to 129. One Republican — Walter Jones (NC-03) — voted against it. Jones is consistently the only Republican to stand up for financial regulations.

Here are the 60 Democrats:

Pete Aguilar (CA-31)

Nanette Barragan (CA-44)

Joyce Beatty (OH-03)

Ami Bera (CA-07)

Don Beyer (VA-08)

Sanford Bishop (GA-02)

Brendan Boyle (PA-13)

Cheri Bustos (IL-17)

Salud Carbajal (CA-24)

Matt Cartwright (PA-17)

Gerry Connolly (VA-11)

Jim Cooper (TN-05)

Lou Correa (CA-46)

Jim Costa (CA-16)

Henry Cuellar (TX-28)

Susan Davis (CA-53)

Diana DeGette (CO-01)

John Delaney (MD-06)

Suzan DelBene (WA-01)

Elizabeth Esty (CT-05)

Bill Foster (IL-11)

Tulsi Gabbard (HI-02)

Jimmy Gomez (CA-34)

Vicente Gonzalez (TX-15)

Josh Gottheimer (NJ-05)

Colleen Hanabusa (HI-01)

Denny Heck (WA-10)

Jim Himes (CT-03)

Bill Keating (MA-09)

Derek Kilmer (WA-06)

Ron Kind (WI-03)

Raj Krishmaoorthi (IL-08)

Annie Kuster (NH-02)

Rick Larsen (WA-02)

Al Lawson (FL-05)

Ted Lieu (CA-33)

Dan Lipinski (IL-03)

Dave Loebsack (IA-02)

Michelle Lujan Grisham (NM-01)

Sean Maloney (NY-18)

Greg Meeks (NY-05)

Seth Moulton (MA-06)

Stephanie Murphy (FL-07)

Tom O’Halleran (AZ-01)

Ed Perlmutter (CO-07)

Scott Peters (CA-52)

Collin Peterson (MN-07)

Jared Polis (CO-02)

Kathleen Rice (NY-04)

Dutch Ruppersberger (MD-02)

Brad Schneider (IL-10)

Kurt Schrader (OR-05)

David Scott (GA-13)

Brad Sherman (CA-30)

Kyrsten Sinema (AZ-09)

Tom Suozzi (NY-03)

Norma Torres (CA-35)

Juan Vargas (CA-51)

Filemon Vela (TX-34)

Debbie Wasserman Schultz (FL-23)

That list contains one Senate candidate (Sinema), two gubernatorial candidates (Polis and Lujan Grisham), and one presidential candidate (Delaney). Interestingly, a large number of Democrats from Southern California (11) were on the list — and not just the usual suspects.