Insurer-funded Rep. Bryan Steil introduces bill to shield industry from federal regulation

Wisconsin U.S. Rep. Bryan Steil is proposing a bill to block the federal Consumer Financial Protection Bureau from adopting regulations that protect consumers from abusive actions by insurers and financial companies that offer such policies as extended warranties and disability insurance. The legislation is a priority for many of Steil’s biggest campaign donors.

On Jan. 16, Steil introduced the Business of Insurance Regulatory Reform Act of 2024. The bill would “clarify the authority of the Bureau of Consumer Financial Protection with respect to persons regulated by a State insurance regulator,” amending the 2010 law that established the bureau. 

In a press release, Steil, who represents Wisconsin’s 1st Congressional District, framed the bill as a step to rein in an out-of-control federal agency before it can undermine state governments.

“State insurance regulators have a strong track record of effective regulation of the insurance industry,” Steil wrote. “When Congress created the CFPB, it excluded the insurance business from the Bureau’s mandate. Unfortunately, the CFPB has tried to expand its authority without any accountability. This legislation makes it clear to the CFPB that it has no authority to regulate the business of insurance. It’s time for the Bureau to start operating within the boundaries set by Congress, and this bill is a step forward in making sure it does.” 

The release notes that a Senate version of the bill has been introduced by Tim Scott (R-SC) and Joe Manchin (D-WV). It also notes the bill is backed by such corporate groups as the American Council of Life Insurers, Council of Insurance Agents and Brokers, the National Association of Insurance and Financial Advisors, and the U.S. Chamber of Commerce. 

Consumer advocates say the bill is the latest case of the financial sector and the Republican lawmakers they bankroll trying to weaken an effective regulator that is protecting consumers.

“The CFPB is a strong advocate for consumers but Wall Street and its allies in Congress have never stopped trying to tear it down, defund it, or limit its authority,” Amanda Jackson, consumer campaign director for Americans for Financial Reform, told the Wisconsin Independent in an emailed statement. “This bill, though technically about insurance, should be seen in that light.”

“It’s a terrible idea,” Ira Rheingold, executive director of the National Association of Consumer Advocates, told the Wisconsin Independent. “The industry has never liked the fact that … the current version of the CFPB [which] is the most effective regulator we’ve had at protecting consumers in a very long time, has authority over it, to a certain degree.”

While the bureau does not oversee insurance companies that offer life insurance policies or automobile insurance plans, Rheingold noted, it does have authority under current law to regulate such policies as add-on credit card disability insurance, credit monitoring, and car warranty extensions. He said the bill would stop any federal oversight over providers of those products and leave it up to state insurance regulators, who tend to be “mostly captured” and controlled by business interests.

The CFPB’s first major action, in July 2012, was a settlement with Capital One Bank in which the company paid $210 million over what the agency called “allegations that the bank tricked consumers into purchasing add-on services, like identity-theft protection and payment protection, under the guise that the additional services were free or mandatory.” Most of that money was refunded directly to customers; the rest was fines paid to the government. 

Since that time, Republicans in Congress have repeatedly tried to eliminate or weaken the agency. In 2020, Steil endorsed a lawsuit filed with the U.S. Supreme Court that challenged the agency’s entire structure; the court ultimately allowed the agency to continue operating, but determined that the president has the power to fire its director.

“This seems like a solution in search of a problem,” Birny Birnbaum, executive director of the nonprofit Center for Economic Justice, told the Wisconsin Independent in an email. “There’s a conspicuous absence of examples of alleged CFPB overstepping.”

Douglas Heller, director of insurance at the Consumer Federation of America, said in an email that like most states, Wisconsin’s state insurance regulators have a poor track record of protecting consumers: “Rep. Steil is simply promoting the insurance industry’s interests in avoiding accountability at every level of government. While CFPB does not focus much of its work on insurance related issues, there certainly is a place for it to act to protect consumers by enforcing federal anti-kickback laws and rules against unfair and deceptive acts by companies. In most states, including Wisconsin, insurance laws and regulations are stacked to favor the insurance companies.”

Nearly identical bills have been filed, but not passed, in previous Congresses. In 2017, Democratic members of the House Committee on Financial Services warned passage “would substantially scale back the Consumer Bureau’s already limited authority over insurance, 

ultimately leaving consumers at higher risk of fraudulent and abusive practices.”

Steil, who now serves on that committee, did not respond to a request for comment for this story.

According to OpenSecrets, the industries he oversees are among his largest campaign contributors. His second- and third-largest groups of industry donors to his campaigns from 2017 through 2023 were designated “securities & investment” with $1.2 million in donations and “insurance” with $786,000. 

“The fact that he received lots of money from them and then introduces a bill like this is completely unsurprising,” said Rheingold. “Because it is not in any way, shape or form, to the benefit of any consumer. That bill is being introduced only for insurance companies; it is not doing any consumer any favor whatsoever.”