House Financial Services Committee Chairman Rep. Barney Frank (D-MA) has formally introduced President Barack Obama’s plan to strengthen consumer protections as a part of a broader financial regulatory restructuring. HR 3126 would establish the Consumer Financial Protection Agency (CFPA), a powerful independent agency with a range of rulemaking, information-gathering, supervisory, and enforcement tools to better protect consumers who purchase financial products from banks and non-bank financial institutions.
“I am pleased to introduce this bill which addresses an issue at the heart of the financial crisis. Recent reports about the lack of mortgage modifications and increases in various fees only reinforce the need for this bill, which is already very clear,” Frank said. “I intend to mark this up by the end of July, and we have already begun to hold hearings on this subject and have had a great deal of consultation among members. I am confident that we will produce a bill that will provide greater consumer protections while in no way burdening the legitimate activities of responsible banking.”
The bill introduces the Obama Administration’s proposal to create the CFPA with certain limited exceptions. Unlike the Administration’s draft, the bill preserves the current federal banking regulators’ role to enforce the Community Reinvestment Act (CRA). In addition, the Administration’s proposal presupposes the creation of the National Bank Supervisory (NBS), a new prudential regulator that would merge the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS). While this is consistent with the Administration’s goals for regulatory restructuring, these considerations will be done at later date. Accordingly, the introduced bill makes references to the OCC and OTS, instead of the NBS.
The following Representatives joined Chairman Frank today as original co-sponsors of the bill: Reps. Maxine Waters (D-CA), Carolyn Maloney (D-NY), Luis Gutierrez (D-IL), Mel Watt (D-NC), Gary Ackerman (D-NY), Brad Sherman (D-CA), Michael Capuano (D-MA), Brad Miller (D-NC), Al Green (D-TX), Keith Ellison (D-MN), Jackie Speier (D-CA), and Alan Grayson (D-FL).
The full text of HR 3126 may be viewed here.