Obama Administration Releases Legislation Creating Consumer Financial Protection Agency

July 1, 2009

New agency aims to protect consumers against unscrupulous practices and promote transparency, fairness and accountability across the financial market.

On June 30, 2009, the Obama Administration introduced regulatory reform legislation that calls for the establishment of a new government agency—the Consumer Financial Protection Agency (CFPA). The CFPA's proposed mission would be to protect consumers against unscrupulous practices and promote transparency, fairness and accountability across the financial market.

Whereas consumer protection is currently overseen by multiple agencies, the proposed legislation, entitled the Consumer Financial Protection Agency Act of 2009, seeks to streamline all financial oversight and regulation into the CFPA, thus making the CFPA the single point of accountability for any business that provides credit, savings, payment and any other financial products or services to consumers.

The CFPA would oversee the entire financial services industry and would take sole responsibility for regulation and compliance—from enforcing current laws and statutes to creating and implementing new regulations. It is the position of the Obama Administration that the CFPA would create a level playing field across all institutions in the financial services industry at the same time it protects the interests of consumers.

For ACA members, this means the CFPA may obtain the authority to enforce and implement rules under the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act and numerous other laws affecting the industry. Any rules implemented by the CFPA would serve as a floor and would allow for states to enact legislation that provides greater protection for consumers.

ACA's Government Affairs staff has been monitoring the activity of this bill and has been meeting with key legislators on the House Financial Services Committee. The Committee is expected to take up this bill as soon as Congress convenes from the Fourth of July Recess, and all information points to quick movement on the issue.
The U.S. Treasury Department issued a press release regarding the Consumer Financial Protection Agency Act of 2009. View the full text of the bill.