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December 11, 2009 - H.R. 4173, the Wall Street Reform and Consumer Protection Act, passed in the House on December 11 by a vote of 223-202, providing reforms for the financial services system.
The bill addresses systemic risk, “too big to fail” institutions, executive compensation, investor protection, credit rating agencies and the Consumer Financial Protection Agency (CFPA), among other financial reforms.
An amendment to the bill excludes credit unions under $10 billion in assets from CFPA examinations. Consumer protection examinations remain with the prudential regulator for credit unions under $10 billion in assets.
Further, H.R. 4173 would create a Financial Services Oversight Council to monitor systemic risk in the financial services arena. The chairmen of the federal banking agencies including the National Credit Union Administration are voting members of this Council. The Council would have an Advisory Board made up of a state bank supervisor and state insurance commissioner, both nonvoting members.
As the legislation moves to the Senate, NASCUS will continue to pay close attention to preemption issues. Last minute amendments to H.R. 4173 impact the Office of the Comptroller of the Currency’s (OCC) standards for preempting state consumer protection laws. The Obama Administration’s and Democrats’ intent was to create a CFPA that would allow states to enforce state and federal laws, as well as develop and write stricter laws, a principle supported by NASCUS.
Committee Chairman Barney Frank (D-Mass.) said in a December 10 press interview that he thinks the preemption amendment essentially reverts back to 2004 OCC preemption standards.
The legislation also establishes a new process for winding down large, financially troubled non-bank institutions in a manner that does not impact taxpayers. In addition, it imposes higher scrutiny on bank holding companies and non-bank institutions.
The legislation will now move to the Senate for consideration. To read more, see this link on the House Financial Services Committee website.
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