CFPA Bill Clears Second House Panel

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter, Oct. 29, 2009.

The House Energy and Commerce Committee on Oct. 29, 2009, voted 33 to 19 in favor of the Consumer Financial Protection Agency Act of 2009 (H.R. 3126), which has already cleared the House Financial Services Committee. The legislation would create a new Consumer Financial Protection Agency (CFPA), responsible for consumer protection across the entire financial marketplace, while also providing important new powers for the Federal Trade Commission (FTC) that would improve the FTC’s rulemaking and enforcement capabilities. The bill would preserve the FTC’s ability to enforce its current statutory authorities and ensure that the agency had shared enforcement over some powers being transferred to the CFPA. The FTC also would have the ability to intervene and have its voice heard in any enforcement actions initiated by the CFPA.

Committee Chairman Rep. Henry Waxman, D-Calif., said he has concerns about amendments that were added to H.R. 3126 during the Financial Services Committee mark-up, which granted “too many exemptions and exclusions.” Waxman said the exclusions that would prevent the CFPA from regulating or enforcing rules against merchants and retailers, auto dealers, and others could weaken the agency and create confusion in the marketplace. Waxman said he wants to examine those exclusions closely as the bill moves toward consideration on the House floor.

The Energy and Commerce Committee adopted a manager’s amendment that would create a five-member commission with staggered terms. No more than three members could come from one political party. House Financial Services Committee Chairman Barney Frank, D-Mass., disagree with this, believing that staggered terms would weaken the ability of the CFPA to protect consumers.

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