Committee on Capital Markets Regulation urges House to both strengthen and moderate the proposed legislation to create a Consumer Financial Protection Agency.

The Committee on Capital Markets Regulation delivered a letter to the Chairmen and Members of the House Financial Services Committee and the Senate Banking, Housing and Urban Development Committee urging them to both strengthen and moderate the proposed legislation to create a Consumer Financial Protection Agency. the Committee found weaknesses in both the Administration-backed H.R. 3126, the Consumer Financial Protection Agency Act (Act) of 2009—that would establish the CFPA—as well as in some of the modifications of that approach proposed by Chairman Frank of the House Financial Services Committee. Hal S. Scott, Director of the Committee and Professor at Harvard Law School, said that “The Committee believes the CFPA does not go nearly far enough in consolidating oversight in the agency’s hands and, as proposed, it perpetuates the patchwork of supervision that has proven damaging and costly for the U.S. economy. With today’s increasingly complex financial products, distinctions between “investors” and “consumers” of financial services are artificial and unworkable. To give the CFPA the proper authority and scope to be effective, the agency should cover both investor and consumer products and federal preemption of consumer protection should be strengthened.”

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