Is Chairman Frank Going To Succeed Creating The CFPA With Bill HR-3126?

By Patrick Cooper Posted in Life Insurance News

What Is The CFPA

The CFPA is an acronym for the Consumer Financial Protection Agency. In a 39-29 vote, the US House Financial Services Committee Thursday approved a measure  that would created the Consumer Financial Protection Agency. The agency will regulate  credit cards, mortgages, and other consumer credit agencies. Businesses that offer financial services including car and home mortgage loans will be monitored by the agency. It would give the Consumer Financial Protection Agency authority to go into financial institutions, including retailers, car dealers, accountants, and lawyers and scour the financial records for improprieties.

The bill also states that most of the smaller institutions would be spared from the investigations and the bill is more targeted toward larger financial institutions. Similar agencies created in the past have had little to no control over the financial institutions they investigated. With the new CFPA, the agency will be able to have greater leeway in their investigations.

What Does Bill HR-3126 Say

The bill that approved the inception of the Consumer Financial Protection Agency states that many insurance companies will be exempt from investigations with the CFPA. The bill was drafted in an effort to  control some of the outrageous spending habits of some of America’s biggest financial institutions.

What Do The Big Banks Say

There are currently lobbying efforts to overturn the HR-3126 bill, mostly spearheaded by the mega-banks. They claim that the bill aims to takeover the financial institutions that would be investigated by the CFPA and that it is one more step to a government controlled financial system. Proponents for the bill say that the American consumer needs to be protected from egregious practices typically seen with the larger institutions. One of the newest investigations by the CFPA is the massive bonuses some of the large financial institutions are set to pay their executives this year. President Obama recently stated that any bank or financial institution that has received tax-payer bail out money will be subject to close scrutiny in the coming months.

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One Response to “Is Chairman Frank Going To Succeed Creating The CFPA With Bill HR-3126?”

  1. Brian J. Donovan says:

    Let’s not forget the fees charged to merchants by credit card issuers.

    The average interchange fee in the U.S. is seven times the interchange fee set by Visa and MasterCard in countries throughout the rest of the world. Using 2008 figures, if the interchange fee charged by credit card issuers was decreased (via comprehensive credit card reform legislation) from the current 2.10% to 0.60%, the result would be an annual savings of approximately $34.3 billion for U.S. merchants and consumers.

    Let’s be clear. The interchange fee is a hidden tax, just not a tax subject to political control or for which there is any discernible social benefit.

    The following article discusses the need for comprehensive, standardized, simplified, and transparent credit card reform legislation.

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