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Inside Washington (02/16/2011)
* WASHINGTON (2/17/11)--Elizabeth Warren, the Obama administration official in charge of setting up the Consumer Financial Protection Bureau (CFPB), on Tuesday lashed out at Republican critics of the agency’s funding (American Banker Feb. 16). She also previewed credit card disclosure reforms aimed at curbing hidden fees and unfair rate hikes. Currently, the CFPB receives its funding from the Federal Reserve, which gives the agency an independent funding stream outside of the appropriations process in Congress. But Warren said critics are trying to “chip away” at the bureau's independence. Rep. Randy Neugebauer (R-Texas) has introduced a legislated proposal that would subject the bureau’s funding to congressional scrutiny amid growing concerns about government spending. Warren said such threats threaten the agency's independence. She also previewed a credit card summit she is hosting on Feb. 22. Warren has advocated simpler credit card agreements, but the industry has argued such changes come too soon after passage of the Credit Card Accountability, Responsibility and Disclosure Act. Warren said she hopes to establish “a fact base” upon which the CFPB can develop a better understanding of the CARD Act … * WASHINGTON (2/17/11)--House Republicans and Democrats on Tuesday traded jabs about the the economic impact of derivatives regulations in a prelude to a broader fight over agency budgets that will be needed to write and enforce the new rules during a House Financial Services Committee hearing (American Banker Feb 16). GOP lawmakers maintain derivatives restrictions were creating fear in the markets, potentially driving U.S. capital offshore and possibly resulting in lost jobs. Republicans also argued derivatives did not cause the financial crisis. “Let’s be clear up-front, right at the beginning of this hearing, end users of derivatives did not cause the financial crisis,” said House Financial Services Committee Chairman Spencer Bachus in his opening statement. “They were among its victims. Although the 2,300-page Dodd-Frank Act was promoted as being directed at Wall Street, as we are coming to understand more clearly, it is the end users of derivatives who will bear so much of the regulatory brunt of this law. As a result, hundreds of American companies could take their capital and jobs elsewhere. One study, released just yesterday, concludes that upward of 130,000 jobs could be lost if U.S. regulators impose new restrictions on derivatives transactions too broadly,” Bachus added. But Democrats--backed by the testimony of regulators--maintain that the new rules would only increase transparency, make discovery easier and boost confidence in the markets, which would feed economic growth …


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