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October 22, 2009 - The Consumer Financial Protection Agency Act of 2009 passed in the House Financial Services Committee by a vote of 39-29 on October 22 and now awaits consideration by the full House.
The legislation would establish a separate federal agency to solely focus on consumer protection. The CFPA would have market-wide jurisdiction as well as rule writing, supervision and enforcement authority. The 20 consumer protection statutes currently shared by seven agencies would be assumed by the new agency.
During the consideration of this legislation, NASCUS encouraged the Committee to formalize consultation with state regulatory agencies in the exercise of the powers and decision making of the agency. The Manager’s Amendment to the bill includes language that directs the CFPA to consult with state regulatory authorities. The legislation as amended also includes a seat at the CFPA’s governing body for the FFIEC State Liaison Committee Chairman, a state regulator.
The CFPA would establish a federal standard for consumer protection as “a floor and not a ceiling” allowing states with stronger consumer protection rules to continue to enforce those rules, as well as the federal standard.
The bill includes an amendment that exempts credit unions under $1.5 billion in assets and banks under $10 billion in assets from CFPA examinations and directs the prudential regulator for those entities to continue examining for consumer protection.
NASCUS will provide updates on the bill as it is considered by the full House.
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