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Wednesday, July 08, 2009
Frank Introduces Consumer Financial-Regulator Bill
By Rich Edson
FOXBusiness
Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, introduced a bill Wednesday that would create a powerful new consumer financial-product regulator -- a proposal championed by many Democrats, but strongly opposed by the financial-services industry.
The Obama Administration sent a similar proposal to Congress last month. Both bills would create the Consumer Financial Protection Agency. That agency would have the power to write and enforce rules with the goal of protecting consumers from misleading or confusing mortgages, credit card terms or other financial products.
Like the President’s plan, the new agency under Frank’s bill would have the authority to charge fees to financial-services providers to fund its operations.
While the Administration’s plan would strip the consumer-oversight authority from current federal banking regulators, namely the Federal Trade Commission, Frank’s bill preserves much of it.
The financial-services industry has strongly lobbied against a new regulator. Banking representatives said it would excessively restrict their businesses from offering a full compliment of financial products. They also argue institutions would pass the government operating fees on to consumers.
Supporters of the plan said the new authority would protect consumers from the no-documentation loans and so-called liar loans that exacerbated the housing downturn.
Frank said he wants to pass this bill out of his committee this month.
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