Financial Regulatory Forum

Consumer protection bill seen in US House-sources

September 16, 2009

U.S. Representative Barney Frank (D-MA), Chairman of the House Financial Services Committee, responds to reporters' questions during the Reuters Global Financial Regulation Summit in Washington, April 28, 2009.  REUTERS/Jonathan Ernst (UNITED STATES POLITICS BUSINESS HEADSHOT)   By Kevin Drawbaugh and Rachelle Younglai
   WASHINGTON,Sept 15 (Reuters) – The Obama administration’s proposal to create a federal watchdog for financial consumers was under discussion in the U.S. House of Representatives on Tuesday, with legislation seen emerging soon.
   The House Financial Services Committee is targeting mid-October for a committee vote on a bill, likely to be adapted from draft language already sent to Capitol Hill by the White House, said sources familiar with the matter.
   Democratic Representative Barney Frank, chairman of the committee, pledged months ago to take up the draft language promptly after the summer recess, which ended last week.
   The administration and congressional Democrats are trying to push through a wide-ranging set of proposals to tighten regulation of banks and capital markets following the severe 2008-2009 financial crisis that rocked economies worldwide.
   The committee has tentatively scheduled 11 hearings on financial reforms by October 9, starting with one on Sept. 23 with Treasury Secretary Timothy Geithner testifying.
   President Barack Obama wants to form a Consumer Financial Protection Agency (CFPA). It would handle consumer protection duties covering credit cards, mortgages and other areas that are now dispersed across several agencies.
   The Federal Reserve and other existing agencies would be stripped of those duties, under the bill, which the agencies have criticized in previous congressional hearings that have laid bare a bureaucratic turf struggle over the matter.
   Frank is seeking comment from fellow committee members, sources said. The business community has been furiously trying to get Congress to water down the scope of the agency. At issue are provisions that would give states the ability to adopt and enforce stricter laws for all types of institutions.
   Lobbyists are also trying to kill a provision that would require regulators to define standards for ‘plain vanilla’ products, such as mortgages with simple terms and contracts. Businesses fear this would stifle innovation and erode profits as consumers sought out government-approved products.
   Frank’s committee has tentatively scheduled a hearing on the CFPA proposal for Sept. 30. Other hearings have been slated on systemic risk regulation, Federal Reserve oversight, credit rating agencies, derivatives and banking supervision.
   For additional information, see the committee announcement at http://financialservices.house.gov/schedule.html. ((Editing by Diane Craft; kevin.drawbaugh@thomsonreuters.com, +1 202 898 8390, +1 202 488 3459 (fax))) Keywords: FINANCIAL REGULATION/CONSUMER 
  
Tuesday, 15 September 2009 23:48:58RTRS [nN1584705 ] {C}ENDS

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