Portland —Today, the U.S. House Financial Services Committee approved landmark reform legislation by a 39 to 29 vote establishing a proposed Consumer Financial Protection Agency, despite often blatantly false attacks from industry opponents. Although several exceptions to the agency’s coverage must still be addressed on the House floor or in the Senate, overall, the CFPA bill as passed creates an independent agency with broad authority to protect consumers in the financial marketplace.
“Consumers need protection from unfair financial marketplace practices, protection that they didn’t get from the regulatory system that failed and left our economy in ruins,” said Dave Rosenfeld, Executive Director of the Oregon State Public Interest Research Group (OSPIRG), “That’s why we need a strong Consumer Financial Protection Agency.”
Rosenfeld added that the Obama-backed Consumer Financial Protection Agency, as passed, has authority to write rules for all financial products and to enforce those rules if violated. Although smaller banks and credit unions will have primary enforcement by their current regulator, the CFPA will write all the rules and has authority to step in over those primary regulators when they fail to do their jobs as well as to enforce them over all bigger banks and all non-banks.
“Despite the efforts of a massive special interest lobby to convince Congress that the 2008 financial meltdown didn’t happen and, even if it did, wasn’t their fault, on Thursday, the House Financial Services Committee approved landmark consumer protection legislation establishing an independent Consumer Financial Protection Agency,” Rosenfeld said.
“As the bill moves forward, we expect further battles to weaken the bill, especially attacks on its critical provision re-establishing federal law as a floor not ceiling of consumer protection. We also anticipate battles to fix a few troubling provisions snuck into the bill, especially exceptions for car dealers and credit life insurance firms,” noted Rosenfeld. “But the underlying bill is sound and today’s vote is the first step toward final action this year to establish a single agency that regulates all financial products to protect consumers from predatory lending.”
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