Consumer Financial Protection Agency May Be In Jeopardy

The proposed Consumer Financial Protection Agency (CFPA) may be in jeopardy this week. The CFPA, which was a mainstay of the Financial Services Bill passed by the House of Representatives last month, may not make it into the Senate bill, according to reports cited by The New York Times.

President Obama met with Senator Christopher J. Dodd (D-CT), chairman of the Senate Banking Committee, on Tuesday in a one-on-one meeting about the bill, after reports last week suggest that Dodd may be willing to drop the CFPA from the Senate version of the bill in order to win the support of Republicans and centrist Democrats.

A source in the Obama administration was quoted as saying that the President’s position on the necessity of the inclusion of the CFPA in the increasingly complicated bill is “nonnegotiable.” The President believes that it is the portion of the bill most likely to be popular with the public.

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Meanwhile, Republicans huddled on Thursday to try to craft their proposal for the Senate version of the bill. Republicans are opposed to the CFPA, which is also opposed by the U.S. Chamber of Commerce and the broader financial industry.

The version of the Financial Services Bill that passed the House of Representatives last month included an amendment giving the CFPA the ability to oversee the reverse mortgage industry to ensure seniors are not exposed to unfair and deceptive practices. It is unclear whether a similar amendment will wind up in the Senate version of the bill.

Write to Reva Minkoff

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  • The reverse mortgage amendment was far worse than that. As Reva reported in her 12/11/2009 RMD article, it required regulations to be written by the CFPA in its first 12 months as if our little industry warranted that much attention.

    Senator Dodd is right. However, if the CFPA is not dropped, the reverse mortgage amendment should be deleted or toned down.

  • The banks are opposed to CFPA, and their lobbyists are determined to kill it. The part of regulatory reform that will pass, however, is going to make life very difficult for the small business mortgage broker or banker.

    In order to increase their hegemony in the marketplace and eliminate most small-business competitors, the banks have used their TARP funds, as well as the money they borrow for free at the discount window to engage in predatory practices, including hiring away our best loan officers with promises of a guaranteed salary and no worries about YSP disclosure.

    • HECM_Dude,

      After the State of the Union address, chances of anything other than removal of the CFPA seem remote at best and even that seems somewhat remote at this point. Most political observers believe the vast majority of the Senate version of this bill will become law. It does not appear that the bill will go away so what egregious provisions need to be struck down?

  • HECM_Dude,rnrnAfter the State of the Union address, chances of anything other than removal of the CFPA seem remote at best and even that seems somewhat remote at this point. Most political observers believe the vast majority of the Senate version of this bill will become law. It does not appear that the bill will go away so what egregious provisions need to be struck down?

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