CFPA May Hold Jurisdiction Over Retirement Plan Service Providers

When Sen. Chris Dodd (D-CT), chairman of the Senate Banking Committee, ultimately releases the next iteration of comprehensive financial services regulatory reform legislation one issue that will be front and center for many groups is how the Dodd draft will treat consumer protection issues. The hottest hot button issue amongst many business organizations is whether the plan will propose creation of Consumer Financial Protection Agency (CFPA), either as a free-standing agency or as an office within either the Treasury or the prudential regulator.

The House has already spoken on the issue. The House bill, H.R.4173, creates a free standing Agency with broad powers. Fortunately, House members agreed with NAIFA that jurisdiction over almost all insurance products and services should be left out of the bill. Sen. Dodd’s first draft did the same.

The House bill also maintained the position that the CFPA should not have jurisdiction over qualified retirement plans. However, at the last minute the House voted to bring pension plan service providers under CFPA jurisdiction. CFPA jurisdiction would be added to that already exercised by the Department of Labor and the U.S. Treasury Department.

NAIFA is currently urging the Senate Banking Committee members to maintain the House’s original position (adopted by the House Financial Services Committee) and adopt a complete carve-out for qualified pension plans and service providers. NAIFA’s position is that expert oversight already is in place at the Department of Labor and Treasury and there is no need for a third agency with jurisdiction.

For a copy of NAIFA’s position paper on the issue click here.

NAIFA Staff Contact: Michael Kerley, Senior Vice President – Federal Government Relations, at (703) 770-8155; or Jill Edwards, Assistant Vice President – Federal Government Relations, at (703) 770-8158; or Dani Kehoe, NAIFA Outside Counsel.