Financial Services Committee Says Yes to Consumer Financial Protection Agency

Today the House Financial Services Committee, chaired by Rep. Barney Frank (MA), passed a bill out of committee (39 to 29) to establish the Consumer Financial Protection Agency. Marking a major step forward for a key piece of the the Obama Administration’s efforts on financial regulatory reform, the agency would be the only one whose sole mission is to protect the financial interests of consumers. It will prevent predatory lending practices and other abuses and ensure that regular Americans get the information they need about financial products like mortgages and credit cards.

Here’s an excerpt from a piece in the Washington Post.

"This is a very significant advance, and I predict it will only get better going forward," the committee's chairman, Rep. Barney Frank (D-Mass.), told reporters after the vote. "I believe it is a major breakthrough…"

“Republicans almost uniformly have opposed it. Representatives of banks and other financial firms, along with powerful lobbying groups such as the U.S. Chamber of Commerce, have flooded Capitol Hill to complain to legislators that the new agency would add an unnecessary layer of government regulation, increase costs, stifle financial innovation and ultimately curtail choices for consumers."

And an excerpt from President Obama’s statement:

This bill has now passed a major hurdle and this step sends an important signal to the American people that we will not stand by and allow big financial firms and their lobbyists to mobilize against change.

They are doing what they always do -- descending on Congress, using every bit of influence they have to maintain the status quo that has maximized their profits at the expense of American consumers, despite the fact that recently those same American consumers bailed them out as a consequence of the bad decisions that they made.

We will continue to work closely with Congress to create, for the first time, a federal agency whose sole mission is to protect the financial interests of everyday Americans with clear rules of the road for financial products and sufficient authority and resources to enforce those rules across the entire market.

The creation of the agency is part of a broader regulatory reform effort that we are working on with Congress to bring a new sense of responsibility and accountability to our financial system.

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