A recent advisory issued by the Consumer Financial Protection Bureau (CFPB) that focuses on home insurance cancellation or cost increases is an issue outside of the bureau’s authority, according to U.S. Rep. Bryan Steil (R-WI).
Specifically, the advisory the CFPB issued on Aug. 30, titled “Take action when home insurance is canceled or costs surge,” warns consumers about potential issues that could arise due to disruptions or changes in their local property insurance markets that could impact their home insurance policies, according to a Sept. 7 letter Rep. Steil sent to CFPB Director Rohit Chopra.
“Despite the importance of this issue, I am concerned that the CFPB would issue an advisory on a topic outside its regulatory authority,” the congressman wrote.
Rep. Steil pointed out that the enacted Dodd-Frank Act, from which the bureau derives its authority, “explicitly excludes” the business of insurance from the CFPB’s jurisdiction, and states that 12 U.S.C. 5517(f) clearly says that “the bureau shall have no authority to exercise any power to enforce this title with respect to a person regulated by a state insurance regulator.”
“Further, the state-based system of insurance regulation has protected policyholders and safeguarded insurer solvency for over 150 years, even in the face of extreme weather events and other catastrophes,” he wrote, adding that Chopra has agreed in previous hearings that the statute does restrict the CFPB’s authority with respect to the business of insurance.
Rep. Steil requested that Chopra answer several questions within two weeks of receiving his letter, including whether the director has changed his view that the CFPB does not possess authority over the business of insurance, and on what basis the CFPB made the decision to issue its Aug. 30 consumer advisory, among others.