Frank's consumer protection plan has CRA difference

WASHINGTON (7/9/09)— House Financial Services Committee Chairman Barney Frank (D-Mass.) introduced a bill Wednesday that would enact President Obama's plan to strengthen consumer protections as a part of a broader financial regulatory restructuring.

In a release, Frank said his bill (H.R. 3126) would establish a Consumer Financial Protection Agency (CFPA. The new agency is intended to be 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.

Frank's bill departs from the Obama plan in two significant ways. The administration had proposed to place Community Reinvestment Act (CRA) enforcement under the purview of the new agency. Frank's bill preserves the current federal banking regulators' role of enforcers.

Also, Frank noted, 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," the release declared. Accordingly, the introduced bill makes references to the OCC and OTS, instead of the NBS.

The Credit Union National Association's (CUNA's) Governmental Affairs Committee and and Executive Committee are reviewing CUNA's policy in light of the new bill. CUNA will be among those briefing Democratic members of the House Financial Services Committee next Tuesday on financial industry views concerning the proposed agency and legislative language.

The bill's co-sponsors include: Reps. Maxine Waters (D-Calif.), Carolyn Maloney (D-N.Y.), Luis Gutierrez (D-Ill), Mel Watt (D-N.C.), Gary Ackerman (D-N.Y.), Brad Sherman (D-Calif.), Michael Capuano (D-Mass.), Brad Miller (D-N.C.), Al Green (D-Texas), Keith Ellison (D-Minn.), Jackie Speier (D-Calif.), and Alan Grayson (D-Fla.).

Frank's financial service panel also announced a hearing entitled "Banking Industry Perspectives on Reform Proposals" for July 15; witnesses are to be announced at a later date.