Fri, October 23, 2009
Consumer Financial Protection Agency Act Moves to House for Vote
Today the House Financial Services Committee approved a bill establishing the Consumer Financial Protection Agency (CFPA).
The agency’s purpose would be “to promote transparency, simplicity, fairness, accountability, and access in the market for consumer financial products or services.” The bill, the Consumer Financial Protection Agency Act of 2009 now goes to the full House for a vote; it has not yet been acted on by the U.S. Senate.
The agency would be empowered to regulate various aspects of consumer borrowing, including mortgages and credit cards. One of its goals would be requiring that these instruments be accompanied by fair, transparent terms with easily-understood language.
There is a summary of the bill’s provisions here. Since the act mentions regulation of “nonbank” institutions that provide consumer financial products and services, there is some speculation as to whether the agency will seek to regulate financial advisers. There are already multiple regulators for different kinds of advisers, so it will be interesting to see how this turns out.