HR-4735-119
Referred to the House Committee on Financial Services.
Sponsored by Bryan Steil (R-WI)
What it does
This bill would amend the Consumer Financial Protection Act to bar the Consumer Financial Protection Bureau (CFPB) from enforcing its rules against companies engaged in the business of insurance if those companies are already regulated by a state insurance regulator. It would also require any CFPB authority over such companies under other consumer protection laws to be "narrowly construed," and directs that enforcement questions be resolved in favor of state insurance regulators.
Who benefits
Insurance companies and agents currently subject to overlapping federal and state oversight, particularly larger insurers with existing compliance relationships with state regulators. State insurance regulators and the National Association of Insurance Commissioners, who would gain clearer primary jurisdiction. Insurance industry trade groups seeking to reduce federal compliance burdens.
Who is hurt
Consumers who file complaints involving insurance-adjacent financial products (such as premium financing or credit-based insurance scores) may lose an avenue for federal CFPB enforcement. Consumer advocacy groups that view CFPB oversight as a backstop when state regulators are under-resourced or slow to act. The CFPB itself, which would lose enforcement authority over insurance-related conduct it currently or potentially could investigate.
Supporters argue
Supporters argue that insurance has been primarily regulated by states since the McCarran-Ferguson Act of 1945, and that CFPB intrusion into insurance creates duplicative, conflicting compliance requirements for companies already subject to rigorous state examination. They contend the bill simply codifies the traditional division of regulatory labor, reducing compliance costs that are ultimately passed on to policyholders.
Opponents argue
Opponents argue that state insurance regulators vary widely in resources and enforcement rigor, and that removing CFPB backstop authority could leave consumers without recourse when insurance-related financial products cause harm that falls between regulatory cracks. They contend the "narrowly construed" language is vague and could be used by industry to challenge legitimate federal enforcement actions in court, effectively shrinking consumer protections through litigation rather than clear legislative intent.