House Financial Services Committee Advances Housing and Financial Services Bills
This week, the House Financial Services Committee approved a comprehensive set of bills aimed at easing banking/financial services regulations and increasing housing supply.
Housing: On the housing front, the committee approved the HUD Evaluation and Optimization Act of 2024 (H.R.8302), a Republican-supported bill to establish a new commission overseeing HUD, with a 27-22 vote along party lines. Next, the Disabled Veterans Housing Support Act (H.R. 7480), a bipartisan effort to expand affordable housing eligibility for disabled veterans, advanced with votes of 49-0 and 37-12 respectively. Finally, the “Yes in My Backyard (YIMBY) Act (H.R. 3507), a bipartisan bill to incentivize better zoning and land-use policies to increase affordable housing, passed with a 48-0 vote. NAHMA is a supporter of the YIMBY Act and will continue to advocate for its final passage and the need to bring these bills before the full U.S. House of Representatives for a final consideration.
Banking/Financial Services Bills: Key financial services legislative changes include a Republican-package led by Rep. Andy Barr (R-Ky.), which narrowly passed with a 24-22 vote along party lines, that aims to reduce the number of banks subject to stringent regulations such as the Volcker Rule and debit interchange requirements. It also aims to increase scrutiny on the Federal Reserve’s processes regarding bank mergers, stress testing, and the discount window.
Additionally, a package from Rep. Young Kim (R-Calif.) that seeks to limit the CFPB’s data collection on small business loans and restrict its enforcement of abusive practices was advanced with a 27-22 vote along party lines. Another bill from Rep. Barr, easing regulations on newer banks, also passed with a 24-22 vote. A bill requiring the CDFI director to testify annually before Congress was approved by voice vote. The committee also advanced several bills affecting the Securities and Exchange Commission (SEC). The Committee’s press release is available here.
Supreme Court Upholds CFPB Funding, Ensuring Regulator’s Survival
In a closely followed decision, the Supreme Court upheld the constitutionality of the Consumer Financial Protection Bureau’s (CFPB) funding mechanism, which bypasses the traditional congressional appropriations process. This ruling preserves the CFPB’s structure and averts impacts on financial regulations and markets.
Ruling Details:
The 7-2 decision rejected claims by payday lenders that Congress’s decision to fund the CFPB independently violated the Constitution’s appropriations clause. The case was closely monitored due to its potential to not only weaken the CFPB but also to undermine the stability of other independently funded federal regulators, including the Federal Reserve Board and Social Security payments.
Implications for the Housing Industry:
For the housing industry, this ruling ensures the continued enforcement of consumer protection laws and the CFPB’s oversight of housing and financial markets, which can affect tenant protections, lending, and housing finance. An adverse ruling could have destabilized these functions and raised broader constitutional questions about federal funding mechanisms.
Long-Term Impact:
Legal experts suggest this decision secures the CFPB’s future and its role in regulating industry practices, despite ongoing opposition from conservative and corporate sectors. The challenge originated from payday lender trade associations. It also reflects the broader business industry tensions with the CFPB’s regulatory approach.