HR 1705 IH
111th CONGRESS
1st Session
H. R. 1705
To create a Financial Product Safety Commission, to provide consumers with stronger protections and better information in connection with consumer financial products, and to give providers of consumer financial products more regulatory certainty.
IN THE HOUSE OF REPRESENTATIVES
March 25, 2009
Mr. DELAHUNT (for himself and Mr. MILLER of North Carolina) introduced the following bill; which was referred to the Committee on Financial Services
A BILL
To create a Financial Product Safety Commission, to provide consumers with stronger protections and better information in connection with consumer financial products, and to give providers of consumer financial products more regulatory certainty.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the ‘Financial Product Safety Commission Act of 2009’.
(b) Table of Contents- The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. Establishment of Commission.
Sec. 5. Objectives and responsibilities.
Sec. 6. Coordination of enforcement.
Sec. 7. Authorities.
Sec. 8. Collaboration with Federal and State entities.
Sec. 9. Prohibited acts.
Sec. 10. Enforcement.
Sec. 11. Reports.
Sec. 12. Authorization of appropriations.
SEC. 2. FINDINGS.
Congress finds that--
(1) the Nation’s multiagency financial services regulatory structure has created a dispersion of regulatory responsibility, which in turn has led to an inadequate focus on protecting consumers from inappropriate consumer financial products and practices;
(2) the absence of appropriate oversight has allowed excessively costly or predatory consumer financial products and practices to flourish; and
(3) the creation of a regulator whose sole focus is the safety of consumer financial products would help address this lack of consumer protection.
SEC. 3. DEFINITIONS.
For purposes of this Act, the following definitions shall apply:
(1) COMMISSION, CHAIRPERSON, AND COMMISSIONER- The terms ‘Commission’, ‘Chairperson’, and ‘Commissioner’ mean the Financial Product Safety Commission established under this Act and the Chairperson and any Commissioner thereof, respectively.
(2) CONSUMER FINANCIAL PRODUCT- The term ‘consumer financial product’ includes--
(A) any extension of credit, deposit account, payment mechanism, or other product or service within the scope of--
(i) the Truth in Savings Act (12 U.S.C. 4301 et seq.);
(ii) the Consumer Credit Protection Act (15 U.S.C. 1601 et seq.); or
(iii) article 3 (relating to negotiable instruments) or article 4 (relating to bank deposits) of the Uniform Commercial Code, as in effect in any State;
(B) any other extension of credit, deposit account, or payment mechanism; and
(C) any ancillary product, practice, or transaction.
(3) APPROPRIATE COMMITTEES OF THE CONGRESS- The term ‘appropriate committees of Congress’ means the Committee on Banking, Housing, and Urban Affairs and the Subcommittee on Financial Services and General Government of the Committee on Appropriations of the Senate, and the Committee on Financial Services and the Subcommittee on Financial Services and General Government of the Committee on Appropriations of the House of Representatives, and any successor committees, as may be constituted.
(4) CONSUMER- The term ‘consumer’ means any individual and any small business concern, as defined in section 3 of the Small Business Act (15 U.S.C. 632).
(5) CREDIT- The term ‘credit’ has the same meaning as in section 103 of the Truth in Lending Act (15 U.S.C. 1602).
SEC. 4. ESTABLISHMENT OF COMMISSION.
(a) Establishment; Chairperson-
(1) ESTABLISHMENT- There is established the ‘Financial Product Safety Commission’ which shall be an independent establishment, as defined in section 104(1) of title 5, United States Code.
(2) MEMBERSHIP-
(A) IN GENERAL- The Commission shall be comprised of 5 commissioners, appointed by the President, by and with the advice and consent of the Senate.
(B) CONSIDERATIONS- In making appointments to the Commission, the President shall consider individuals who, by reason of their background and expertise in areas related to consumer financial product safety, are qualified to serve as members of the Commission.
(3) CHAIRPERSON- The Chairperson of the Commission shall be appointed by the President, by and with the advice and consent of the Senate, from among the members of the Commission.
(4) REMOVAL- Any Commissioner may be removed by the President for neglect of duty or malfeasance in office, but for no other cause.
(b) Term; Vacancies-
(1) IN GENERAL- Except as provided in paragraph (2)--
(A) the Commissioners first appointed under this section shall be appointed for terms ending 3, 4, 5, 6, and 7 years, respectively, after the date of enactment of this Act, the term of each to be designated by the President at the time of nomination; and
(B) each of their successors shall be appointed for a term of 5 years from the date of the expiration of the term for which the predecessor was appointed.
(2) LIMITATIONS- Any Commissioner appointed to fill a vacancy occurring prior to the expiration of the term for which the predecessor thereof was appointed shall be appointed only for the remainder of such term. A Commissioner may continue to serve after the expiration of such term until a successor has taken office, except that such Commissioner may not continue to serve more than 1 year after the date on which the term of that Commissioner would otherwise expire under this subsection.
(c) Restrictions on Outside Activities-
(1) POLITICAL AFFILIATION- Not more than 3 Commissioners may be affiliated with the same political party.
(2) CONFLICTS OF INTEREST- No individual may serve as a Commissioner if that individual--
(A) is in the employ of, holding any official relation to, or married to any person engaged in selling or devising consumer financial products;
(B) owns stock or bonds of substantial value in a person so engaged;
(C) is in any other manner pecuniarily interested in a person so engaged; or
(D) engages in any other business, vocation, or employment.
(d) Vacancies; Quorum; Seal; Vice Chairperson-
(1) VACANCIES- No vacancy on the Commission shall impair the right of the remaining Commissioners to exercise all the powers of the Commission.
(2) QUORUM- Three members of the Commission shall constitute a quorum for the transaction of business, except that--
(A) if there are only 3 members serving on the Commission because of vacancies on the Commission, 2 members of the Commission shall constitute a quorum for the transaction of business; and
(B) if there are only 2 members serving on the Commission because of vacancies on the Commission, 2 members shall constitute a quorum for the 6-month period (or the 1-year period, if the 2 members are not affiliated with the same political party) beginning on the date of the vacancy which caused the number of Commissioners to decline to 2.
(3) SEAL- The Commission shall have an official seal, of which judicial notice shall be taken.
(4) VICE CHAIRPERSON- The Commission shall annually elect a Vice Chairperson to act in the absence or disability of the Chairperson or in case of a vacancy in the office of the Chairperson.
(e) Offices- The Commission shall maintain a principal office and such field offices as it determines necessary, and may meet and exercise any of its powers at any other place.
(f) Functions of Chairperson; Request for Appropriations-
(1) DUTIES- The Chairperson shall be the principal executive officer of the Commission, and shall exercise all of the executive and administrative functions of the Commission, including functions of the Commission with respect to--
(A) the appointment and supervision of personnel employed by the Commission (and the Commission shall fix their compensation at a level comparable to that for employees of the Securities and Exchange Commission);
(B) the distribution of business among personnel appointed and supervised by the Chairperson and among administrative units of the Commission; and
(C) the use and expenditure of funds.
(2) GOVERNANCE- In carrying out any of the functions of the Chairperson under this subsection, the Chairperson shall be governed by general policies of the Commission and by such regulatory decisions, findings, and determinations as the Commission may, by law, be authorized to make.
(3) REQUESTS FOR APPROPRIATIONS- Requests or estimates for regular, supplemental, or deficiency appropriations on behalf of the Commission may not be submitted by the Chairperson without the prior approval of a majority vote of the Commission.
(g) Agenda and Priorities; Establishment and Comments- Not later than 30 days before the beginning of each fiscal year, the Commission shall establish an agenda for Commission action under its jurisdiction and, to the extent feasible, shall establish priorities for such actions. Before establishing such agenda and priorities, the Commission shall conduct a public hearing on the agenda and priorities, and shall provide reasonable opportunity for the submission of comments.
SEC. 5. OBJECTIVES AND RESPONSIBILITIES.
Full Text of Legislation