House Committee Clears Bill to Undo HAMP, CFPB Independence

The ""House Financial Services Committee"":http://financialservices.house.gov/ signed off on largely symbolic legislation Wednesday that would repeal bailout funds under the Dodd-Frank Act, eliminate force-placed insurance requirements, and rope the ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB) into future congressional appropriations processes.

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Clearing the legislation by a party-line vote, committee members billed it as a way to slash $35 billion from the national deficit.

""Our nation is in a spending-driven debt crisis. The solution isn't to tax Americans more, it's for Washington to spend less,"" Rep. ""Spencer Bachus"":http://bachus.house.gov/ (R-Alabama), who chairs the committee, said in a statement.

The committee said it rejected an amendment offered by Rep. ""Barney Frank"":http://frank.house.gov/ (D-Massachusetts) to replenish bailout funds for systemically important institutions in the event

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of another financial crisis.

Just what would the bill accomplish?

According to the nonpartisan ""Congressional Budget Office"":http://www.cbo.gov/, it would save taxpayers $10 billion over the next decade by slashing revenue for federal programs and agencies like the Home Affordable Modification Program (HAMP) and CFPB.

The bill proposed doing away with bailout mechanisms under Dodd-Frank, appropriating only $200 million for the CFPB for the next fiscal year, and undoing HAMP entirely.

HAMP remains an embattled program. The special inspector general for the Troubled Asset Relief Program ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô under which lawmakers established it in 2009 ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô found in a recent report that 782,609 permanent loan modifications fell short of the 3 to 4 million homeowners that administration officials said it would help.

News that it disbursed only $2.54 billion of an available $30 billion to homeowners in distress continues to give ammunition to more conservative lawmakers with a desire to do away with it.

The legislation also called for a temporary suspension of the mandatory purchase requirement under force-placed insurance and regular updates for Congress when revisions take place for maps of properties eligible for it.

Sources tell us that it is unlikely the bill will become law this year. The House will need to take up the bill for a full-chamber vote and the Democratic Senate will need to conference it with similar legislation.