As demonstrated in this Wall Street Journal op-ed the way Elizabeth Warren and consumer groups "frame" the debate about strengthening consumer protection is: you either support the CFPA, or you’re altogether anti-consumer and anti-family. This argumentative and narrow view on an important public policy debate does a significant disservice to consumers across the country. Proclaiming it’s "our way or the highway" has prevented any real and substantive debate about alternatives to the CFPA that won’t result in a significant reduction in the availability and affordability of credit for consumers, small businesses and communities when they can least afford it. The Chamber has proposed an alternative approach that fills the gaps in regulation, provides consumers the information they need to make financial decisions and facilitates tough as nails enforcement to protect consumers, all without the need to create a new massive bureaucracy.

Although Ms. Warren’s op-ed references "Wall Street CEOs" nine times, her choice of a popular target hides the unfortunate reality that the CFPA’s impact will disproportionately fall on those it’s purported to protect – consumers and small businesses. 

First, the CFPA is not limited to, nor even targeted at, credit cards and mortgages. The CFPA would have power over businesses that are non-financial in nature, and that have at best a tangential relationship to consumer finance. For example, the bill the Senate is considering would require that the CFPA regulate any business that extends credit in which a finance charge is imposed, or in which more than four payments are allowed over time. This would encompass businesses across the country who provide flexible payment plans to their customers. The small business owner that allows his customers to pay over time is far from a Wall Street CEO.  In addition, businesses that simply contract for goods or services with firms that offer consumer financial products would be under the CFPA’s authority – advertisers, technology companies, data processers, software providers, etc. 

As such, rather than keep the agency’s focus on the areas where risk to consumers is highest, the CFPA represents an overly broad and massive new agency with an expansive, ill-defined mission.

Second, the CFPA doesn’t consolidate – in fact, most of the businesses referenced above are already regulated by the Federal Trade Commission (FTC), and the FTC will retain its authority over them.

Third, the CFPA sets the floor for consumer protection laws – allowing the 50+ states to pass their own laws that may conflict with the CFPA and with each other. In addition, State Attorneys General can enforce the CFPA laws based upon their own interpretation. This means a lot of overlapping, confusing and conflicting rules – which makes little sense in light of the need to simplify disclosures to consumers.

Lastly, the CFPA would have very broad and vague regulatory authority over any products that are "abusive." But, no one knows what that means. And businesses that want to comply won’t know what that means – leaving them in a guessing game about whether they’re in compliance.  This should provide little comfort to consumers, and creates significant disincentives for financial institutions to lend.

As the Senate begins to hammer down the details of its regulatory reform bill, we need a more open and honest debate about what the CFPA actually is, and what consumers actually need.  If there are regulatory gaps, let’s fill them. And if regulators failed to enforce the numerous consumer protection laws on the books, let’s hold them accountable. Let’s not add a new regulator to the mix without understanding why existing regulators aren’t working. And lastly – let’s make disclosure work for consumers through a strong, clear, uniform national standard – not 50+ new sets of disclosure rules.

Democrats and Republicans should work together to achieve comprehensive reform that both protects consumers and facilitates the flow of credit to America’s job creators.