Frank Hails ‘Major Breakthrough’ in Financial Regulation

On Thursday, the House Financial Services Committee voted in favor of a bill aimed at creating the U.S. Consumer Financial Protection Agency, a watchdog organization designed in response to President Barack Obama’s call for greater oversight and regulation of banks and other financial companies in light of the past year’s economic implosion. Two big supporters of the agency on Capitol Hill, Rep. Barney Frank and Elizabeth Warren, chair of the bailout watchdog panel, sure are pleased, even if — or, rather, especially because — the banks aren’t. –KA

Reuters via Google News:

“The Consumer Financial Protection Agency will prevent predatory lending practices and other abuses and will ensure that consumers get clear information they can understand about financial products like credit cards and mortgages,” Obama said in a statement welcoming the committee’s vote.

Committee Chairman Barney Frank, who is steering reform in the House, called the panel vote a “major breakthrough.”

U.S. businesses and financial services firms lobbied fiercely to kill the bill, arguing that such an agency would impose onerous and duplicative rules as well as crimp innovation.

The bill backed by the panel trimmed back the Obama proposal, exempting many auto dealers, as well as credit, mortgage and title insurers, from CFPA oversight.

But Elizabeth Warren, the top watchdog for the government’s $700 billion bailout program and early advocate of the consumer agency, voiced delight the powerful banking lobby was unable to knock down the wider plan.

“When I first came to Washington with the idea of this agency, everyone told me ‘the banks always win, quit now because the banks always win.’ They didn’t win today,” Warren told reporters.

Read more