Bill That Could Narrow CFPB's Insurance Authority Is Back
The bill would keep the bureau from overseeing the insurance activities of persons overseen by state insurance regulators.
Lawmakers have revived efforts to keep the Consumer Financial Protection Bureau from trying to regulate the insurance activities of companies or individuals that are under the jurisdiction of state insurance regulators.
The bill, the Business of Insurance Regulatory Reform Act of 2024, would also require the CFPB to construe its authority narrowly if it were trying to regulate the insurance activities of persons that are clearly subject to its enforcement authority.
Sens. Tim Scott, R-S.C., and Joe Manchin, D-W. Va., reintroduced the bill in the Senate. Rep. Bryan Steil, R-Wis., reintroduced the bill in the House.
At press time, the bill did not yet have a bill number.
What it means: The CFPB continues to face resistance in Congress to any efforts to oversee the business of insurance.
The history: Congress created the CFPB in the wake of the 2007-2009 Great Recession, in the Dodd-Frank Wall Street Reform Consumer Financial Protection Act of 2010.
Lawmakers have repeatedly introduced bills designed to keep the bureau from expanding its reach.
Bills similar to the new bill were introduced in the 2017-2018 Congress, as S. 2702 and H.R. 3746, and in the 2019-2020 Congress as S. 4325.
Leaders of the National Association of Insurance Commissioners wrote in support of S. 4325.
The list of co-sponsors of the 2017-2018 bill included Sen. Tammy Baldwin, D- Wis., Sen. Mike Rounds, R-S.D., and Sen. Joni Ernst, R-Iowa, in addition to Scott and Manchin.
The new bill: The list of organizations officially supporting the new version of the CFPB scope bill includes the American Council of Life Insurers and the National Association of Insurance and Financial Advisors along with property and casualty insurer groups, the Consumer Credit Industry Association and the U.S. Chamber of Commerce.
Manchin noted in the bill announcement that the bill would hold the CFPB to the same scope limitations as the U.S. Treasury Department’s Federal Insurance Office, another entity created by the Dodd-Frank Act.
Scott said the bill will protect state-based insurance regulation from “unchecked bureaucrats in Washington.”
ACLI President Susan Neely said the new bill makes a clear statement that oversight of the business of insurance should remain within the purview of the states.
“Through wars, economic turmoil, global pandemics and structural shifts in the industry, state insurance regulators have demonstrated their ability to oversee insurers and protect the best interests of consumers,” Neely said.
The U.S. Capitol rotunda. Photo: Diego M. Radzinschi/ALM