Following the financial crisis of 2008, congressional leaders and the Obama administration began work on massive financial regulatory reform legislation that would ultimately become the Dodd-Frank Wall Street Reform and Consumer Protection Act. One of the cornerstones of the legislation was the Consumer Financial Protection Bureau. The brainchild of Elizabeth Warren prior to her joining the Senate, the CFPB was designed to regulate all financial products and those companies that provide them. While the CFPB was granted an incredible amount of power with a very broad scope, NAMIC’s efforts during the legislative process were successful in ensuring that insurance companies and products were exempted from the CFPB’s jurisdiction.
Unfortunately, the CFPB has demonstrated its willingness to push the limits of its power to try to extend its reach to entities it was never intended to regulate. For example, auto dealers were to be exempt from CFPB regulation, but the bureau is looking for creative methods to use its rulemaking and enforcement authority to impact the industry via indirect auto lending. NAMIC remains wary of the CFPB’s efforts to expand its authority to impact insurance in roundabout ways. The association has and will continue to work with members of Congress to ensure the bureau receives the proper level of oversight and it does not encroach on insurance issues.
Insurance has always been and should always be regulated at the state level. The Dodd-Frank Wall Street Reform and Consumer Protection Act specifically notes that it was not the intention of the legislation to change the state-based system of insurance regulation or delegate consumer protection to the federal government. No CFPB regulation should impact the business of insurance.