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House Revamps Financial Overhaul Proposal

Under the guidance of Rep. Barney Frank, the House Financial Services Committee made changes to a plan designed to increase government oversight of various financial markets, ideally to avoid a recurrence of last year’s economic catastrophe. It’ll mean more focus on certain types of businesses than others. –KA

The Wall Street Journal:

Mr. Frank has told colleagues the plan would no longer require banks to offer borrowers “plain vanilla” mortgages and other products, which was part of the White House’s June proposal.

The Massachusetts Democrat also limited the types of companies that could come under the scrutiny of a new Consumer Financial Protection Agency. For example, merchants, retailers, auto dealers, real-estate brokers and accountants wouldn’t face scrutiny by the new agency. And the agency wouldn’t be able to approve or change business plans at financial companies.

Mr. Frank said he believed the Obama administration “overdrafted” the bill.

“In general, we’re very supportive of the changes” made by Mr. Frank, Mr. Geithner told the committee.

[…] Plenty of complicated questions remain, such as the future role of the Federal Reserve and how many bank regulators there should be, and there are still multiple lawmakers in both parties who either want the consumer financial agency scrapped or further limited in its scope.

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