Someone to Watch Over You
After many days of debate and negotiation, the House Financial Services Committee approved legislation 39-29 on Thursday to create a Consumer Financial Protection Agency, a key and controversial element of President Barack Obama’s plan to overhaul the financial industry.
“This bill has now passed a major hurdle and this step sends an important signal to the American people that we will not stand by and allow big financial firms and their lobbyists to mobilize against change,” said Obama.
American Bankers Association official Floyd Stoner expressed continued opposition to the bill, citing “the very broad, ill-defined authority that is granted to this new agency that could be used to justify essentially any regulatory action,” and other issues.
The legislation would empower the agency to write rules to protect consumers from predatory mortgage lending, credit card and other practices that contributed to the financial meltdown. It would enforce a law passed earlier this year to protect consumers from sudden increases in credit card interest rates. Banks with less than $10 billion in assets will not have to open up their books to CFPA examiners. The bill eliminated a proposal by the Obama administration to require banks to offer standardized, “plain vanilla” products.
“I think the most important thing is that it would create an agency that has somebody going to work everyday thinking that [his or her] primary responsibility is looking out for the interests of consumers, ” said Rep. Mel Watt (D-North Carolina), who sits on the committee.