bobbyw24
10-21-2009, 08:02 AM
Consumer watchdog nears House panel approval
By Kevin Drawbaugh
Reuters
Wednesday, October 21, 2009 7:48 AM
WASHINGTON (Reuters) - A U.S. congressional committee is likely on Wednesday to endorse the creation of a financial watchdog agency to protect consumers, with large banks likely to feel its bite worst.
The proposed Consumer Financial Protection Agency (CFPA), a linchpin of the Obama administration's plan to tighten regulation after the worst financial crisis in decades, has been under attack from bank lobbyists and Republicans.
Over months of debate, the agency's scope and scale have been cut back through the bill-drafting process in the U.S. House of Representatives Financial Services Committee.
The panel is likely to approve a bill that would exempt a long list of businesses from CFPA jurisdiction but expose large banks to tougher new oversight.
The new agency would have purview over credit cards, mortgages, bank fees and other financial products. It would strip existing agencies, including the Federal Reserve, of consumer protection duties, centralizing them.
A full House vote was not expected until November. The outlook for the proposed agency was unclear in the Senate, where lawmakers are moving more slowly on financial reform.
The House committee vote will be "only the start of the fight," said Jaret Seiberg, policy analyst at investment firm Concept Capital. "The CFPA piece of financial reform is likely to change greatly in the Senate."
Democratic supporters of the CFPA say it is needed to replace agencies that have failed to protect consumers through the crisis and in the years before it.
Critics call it a new layer of government bureaucracy that could stifle financial innovation.
"Regardless of what the final bill looks like, we think the way that the bill is expected to emerge ... bolster(s) our thesis that we are entering an era of one set of rules for large banks as compared to smaller banks," said Brian Gardner, policy analyst at the financial firm Keefe, Bruyette & Woods.
SMALL BANKS GET A BREAK
A turning point in the bill's journey through the House committee was the deletion last month of an administration provision that would have required banks to offer "plain vanilla" financial products, such as simple,
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/21/AR2009102100872.html?hpid=moreheadlines (http://www.washingtonpost.com/wp-dyn/content/article/2009/10/21/AR2009102100872.html?hpid=moreheadlines)
By Kevin Drawbaugh
Reuters
Wednesday, October 21, 2009 7:48 AM
WASHINGTON (Reuters) - A U.S. congressional committee is likely on Wednesday to endorse the creation of a financial watchdog agency to protect consumers, with large banks likely to feel its bite worst.
The proposed Consumer Financial Protection Agency (CFPA), a linchpin of the Obama administration's plan to tighten regulation after the worst financial crisis in decades, has been under attack from bank lobbyists and Republicans.
Over months of debate, the agency's scope and scale have been cut back through the bill-drafting process in the U.S. House of Representatives Financial Services Committee.
The panel is likely to approve a bill that would exempt a long list of businesses from CFPA jurisdiction but expose large banks to tougher new oversight.
The new agency would have purview over credit cards, mortgages, bank fees and other financial products. It would strip existing agencies, including the Federal Reserve, of consumer protection duties, centralizing them.
A full House vote was not expected until November. The outlook for the proposed agency was unclear in the Senate, where lawmakers are moving more slowly on financial reform.
The House committee vote will be "only the start of the fight," said Jaret Seiberg, policy analyst at investment firm Concept Capital. "The CFPA piece of financial reform is likely to change greatly in the Senate."
Democratic supporters of the CFPA say it is needed to replace agencies that have failed to protect consumers through the crisis and in the years before it.
Critics call it a new layer of government bureaucracy that could stifle financial innovation.
"Regardless of what the final bill looks like, we think the way that the bill is expected to emerge ... bolster(s) our thesis that we are entering an era of one set of rules for large banks as compared to smaller banks," said Brian Gardner, policy analyst at the financial firm Keefe, Bruyette & Woods.
SMALL BANKS GET A BREAK
A turning point in the bill's journey through the House committee was the deletion last month of an administration provision that would have required banks to offer "plain vanilla" financial products, such as simple,
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/21/AR2009102100872.html?hpid=moreheadlines (http://www.washingtonpost.com/wp-dyn/content/article/2009/10/21/AR2009102100872.html?hpid=moreheadlines)