The Consumer Financial Protection Agency Act of 2009 (H.R. 3126)
Provided by Tom Hudson this morning ... Not exactly news we wanted to hear.
Yesterday, Congressman Barney Frank (D-Mass.), Chairman of the House Financial Services Committee, formally introduced President Obama's proposal to establish a Consumer Financial Protection Agency (CFPA). The Consumer Financial Protection Agency Act of 2009 (H.R. 3126) is one piece of President Obama's effort to overhaul the U.S. financial regulatory system and represents Obama's attempt to separate prudential regulation from consumer protection regulation. To that end, the bill would:
• Transfer to the CFPA the rulemaking and enforcement authority for all federal consumer credit statutes, including TILA, FCRA, and ECOA, among others. Similarly, the bill would transfer to the CFPA the consumer protection functions (and related personnel) of the federal banking agencies.
• Give the CFPA the authority to issue rules prohibiting unfair and deceptive acts and practices in connection with any transaction with a consumer for a consumer financial product or service.
• Authorize the CFPA to require creditors to provide a "standard consumer product or service" (i.e., a "plain vanilla" product) along with any alternative consumer product or service and provide disclosures about the risks associated with alternative consumer products or services.
• Authorize the CFPA to impose duties (e.g., a fiduciary duty) on covered persons that have contact with consumers in the course of providing consumer products or services.
• Impose liability on any covered person who provides a consumer product or service in violation of H.R. 3126, and on any person who knowingly or recklessly provides substantial assistance to a covered person who engages in an unfair, deceptive, or abusive act or practice as defined by the CFPA.
In addition to the provisions establishing the CFPA, H.R. 3126 removes certain federal preemptions for depository institutions and provides that consumer protection provisions in state consumer laws of general application, including any law relating to unfair or deceptive acts or practices, any consumer fraud law and repossession, foreclosure, and collection law apply to federal depository institutions. H.R. 3126 also includes provisions that would require depository institutions to collect and retain information relating to customer deposit accounts and small business loan applications.
Chairman Frank intends to have H.R. 3126 marked up before the end of July and has already commenced a series of hearings to discuss the bill.
Financial Services Committee Press Release: http://www.house.gov/apps/list/press/financialsvcs_dem/press_070809...
Text of H.R. 3126: (attached as PDF)
Administration's White Paper: http://www.financialstability.gov/docs/regs/FinalReport_web.pdf
Yesterday, Congressman Barney Frank (D-Mass.), Chairman of the House Financial Services Committee, formally introduced President Obama's proposal to establish a Consumer Financial Protection Agency (CFPA). The Consumer Financial Protection Agency Act of 2009 (H.R. 3126) is one piece of President Obama's effort to overhaul the U.S. financial regulatory system and represents Obama's attempt to separate prudential regulation from consumer protection regulation. To that end, the bill would:
• Transfer to the CFPA the rulemaking and enforcement authority for all federal consumer credit statutes, including TILA, FCRA, and ECOA, among others. Similarly, the bill would transfer to the CFPA the consumer protection functions (and related personnel) of the federal banking agencies.
• Give the CFPA the authority to issue rules prohibiting unfair and deceptive acts and practices in connection with any transaction with a consumer for a consumer financial product or service.
• Authorize the CFPA to require creditors to provide a "standard consumer product or service" (i.e., a "plain vanilla" product) along with any alternative consumer product or service and provide disclosures about the risks associated with alternative consumer products or services.
• Authorize the CFPA to impose duties (e.g., a fiduciary duty) on covered persons that have contact with consumers in the course of providing consumer products or services.
• Impose liability on any covered person who provides a consumer product or service in violation of H.R. 3126, and on any person who knowingly or recklessly provides substantial assistance to a covered person who engages in an unfair, deceptive, or abusive act or practice as defined by the CFPA.
In addition to the provisions establishing the CFPA, H.R. 3126 removes certain federal preemptions for depository institutions and provides that consumer protection provisions in state consumer laws of general application, including any law relating to unfair or deceptive acts or practices, any consumer fraud law and repossession, foreclosure, and collection law apply to federal depository institutions. H.R. 3126 also includes provisions that would require depository institutions to collect and retain information relating to customer deposit accounts and small business loan applications.
Chairman Frank intends to have H.R. 3126 marked up before the end of July and has already commenced a series of hearings to discuss the bill.
Financial Services Committee Press Release: http://www.house.gov/apps/list/press/financialsvcs_dem/press_070809...
Text of H.R. 3126: (attached as PDF)
Administration's White Paper: http://www.financialstability.gov/docs/regs/FinalReport_web.pdf
Tags: cfpa, consumer, finance, frank, obama
- Attachments:
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Frank Bill.pdf, 415 KB
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Replies to This Discussion
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Permalink Reply by A Jay Gould on -
Barney Frank,Nancey Pelosi, and Reed are the three most dangerous people in congress,possibly the world. Barney Frank is supporting this bill ,yet he is an advocate of current legistlation to make the termination of dealers a State issue not Federal. All this tells me is he's secure in the fact what the government did in forcing GM and Chrysler to terminate dealers will stand up and he can play both sides of the street.
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Permalink Reply by Harlene Doane on -
One warning to everyone the pdf is 129 pages ... might be bedtime material unless you are an attorney (no offense to Tom Hudson)
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Permalink Reply by Dennis Craig on -
It certainly is becoming an Obamanation!
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Permalink Reply by Randy Henrick on -
This bill is not such a bad thing for dealers. Lenders have been effectively unregulated on consumer credit issues (a prime cause of the current recession) and this will put more focus on some of their behavior which previously has been dealt with by a slap on the wrist in regulatory compliance exams behind closed doors. That fact coupled with the recent Cuomo decision by the Supreme Court allowing AGs to sue lenders will divert much of their attention from dealers. The bill will get watered down--the banking industry is throwing their millions of dollars of lobbying at it--but it will put more of consumer abuses on the banks where it belongs. We are in the mess we are today because regulators did nothing against unsafe and unsound bank lending during the Bush Administration. So don't blame Barney Frank and Nancy Pelosi, blame Dubba and Cheney. Uniformity and one federal regulator will help dealers more than hurt them.
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