Financial Regulatory Reform: Analysis of the Consumer Financial Protection Agency (CFPA) as proposed by the Obama Adminstration and H.R. 3126

The Report: Financial Regulatory Reform: Analysis of the Consumer Financial Protection Agency (CFPA) as proposed by the Obama Adminstration and H.R. 3126


Location: R40696


What do you learn:
The Obama Administration and their allies in Congress are developing a plan comparable to the United Kingdom's Financial Services Authority to consolidate many financial regulatory agencies and responsibilities. The President has drafted his white paper for a Consumer Financial Protection Agency (CFPA) and Rep. Barney Frank has his in H.R. 3126 Their five goals of their plan are the following 1. "Promote robust supervision and regulation of financial firms" 2. "Establish comprehensive supervision and regulation of financial markets" 3. "Protect consumers and investors from financial abuse" 4 "Improve tools for managing crises" and 5. "Raise international regulatory standards and improve international cooperation"

The CFPA would be run by a board of four people with staggered terms that would have regulatory authority over all sorts of financial products such as mortgages, credit cards but not securities and commodities. The CFPA would be charged with the enforcer of many current financial regulations such as the American Mortgage Transaction Parity Act, The Community Reinvestment Act (CRA), Consumer Leasing Act, the Electronic funds transfer Act, the Equal Credit Opportunity Act, The Fair Credit Billing Act and the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, Gramm-Leach-Billey Act, The Truth in Lending Act and several other regulations. The Act however, would not supersede existing state consumer protection laws. It does not outright impose new rules but does through a regulatory proceedure with a public comment period for each rule change.

Rep. Frank however in his H.R. 3126 does not relinquish the CRA authority in his bill to the CFPA. The Bill there is no plan in the foreeable future for the thrift chart. You learn that the President manipulates those sorts of things in to state and national banks.

The Report then raises the point is CFPA a major improvement for the American consumer? Is it redundant? What does it do for the ability of American Capitalists to be financially innovative? And the fact the SEC and CFTC are left out the regulations.