A closer look at Frank’s changes to the U.S. consumer agency bill
September 29th, 2009 | 
Author: Rep. Barney Frank (D., Mass.), has introduced a revised U.S. consumer agency bill that is designed to address criticism that certain provisions of the bill were too vague, while others were too restrictive. The changes:
- Eliminated the requirement that financial service providers must offer a “plain-vanilla” or “standard” products like low interest, low fee credit cards and 30 year mortgages.
- Clarified who the Consumer Financial Protection Agency (CFPA) would regulate:
o Providers of consumer finance offerings.
o Eliminated:
§ Accountants and tax preparers
§ Auto dealers
§ General Insurers
§ Lawyers
§ Consumer reporting agencies
§ Real Estate brokers and agents
§ Providers of services to financial institutions that are strictly ministerial and support services
§ Merchants providing incidental credit
§ Communications providers
§ Providers o f retirement and pension plans
o Added debt settlement service providers.
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Changed the sources of funding to include:
o The Federal Reserve Bank
o “Covered persons” based on:
§ Compliance record
§ Size and complexity of business
- Extend the registration, reporting and examination requirements to “covered persons” that are non-depository.
- Eliminated the requirement that consumer communications need to be “reasonable.”
- Restructure the agency to include a director who will be advised by a Consumer Financial Protection Oversight Board, which will include federal banking regulators and other agencies.
- Mandated the coordination of examinations between the CFPA and state and federal banking regulators and clear procedures for resolving disagreements between regulators.
Frank expects that the changes will make it more liely that the bill will be passed. I think the changes make sense for the most part. What do you think?
Posted in Regulatory Reform
