The House Financial Services Committee, by a 39-29 vote yesterday, has approved H.R.3126, the Consumer Financial Protection Agency (CFPA) Act of 2009. It's a step in the right direction.
Introduced by Committee Chair Barney Frank, D-Mass., H.R.3126 is a pared-down version of the agency originally envisioned and proposed by President Obama. A provision that was heavily scrutinized by bankers, the requirement for "plain vanilla" products, was left out of Frank’s bill.
Another major point of contention in the original CFPA proposal allowed the federal agency to set a regulatory floor, meaning more stringent regulations could be developed on a state-by-state basis. That provision was changed, and H.R.3126, as approved by the committee, would allow the CFPA to overrule state consumer protection laws in special circumstances and on a case-by-case basis.
While Republicans on the committee made every effort to water down the bill, Jim Himes (CT-04) spoke about the importance of passing this bill as originally crafted: