Consumer Financial Protection Agency Debated in Congress

As Barney Frank’s Financial Services Bill (H.R. 4173) comes to the floor in the House of Representatives this week, one closely watched possible addition is the Minnick Amendment

Sponsored by Rep. Walt Minnick (D-Idaho), the Minnick Amendment would eliminate the proposed Consumer Financial Protection Agency (CFPA) and replace it with a council of existing regulators that would focus on consumer protection.  While, as of Wednesday night, it remains unclear whether the amendment will come to the floor, it would substantially change the bill.

The amendment is supported by Centrist Democrats, who are wary of the scope of powers under the CFPA. The ICBA (Independent Community Bankers of America) is encouraging Minnick to pursue the amendment while remaining non-committal.  The ABA (American Bankers Association) meanwhile has come out against the bill as a whole.

As debate continues, it will be interesting to see what will happen to the CFPA, an agency that, if created, would have oversight over the real estate and mortgage industry and beyond.  The agency would also work on creating uniform “consumer friendly” disclosures, including a combined “good faith estimates” and truth-in-lending statement.  As a result, it is likely to have an effect on the reverse mortgage industry, both directly and indirectly. For more information on what the CFPA might look like, see the overview of the proposal in The LATimes

While the National Reverse Mortgage Lenders Association (NRMLA) has no comment on the bill at this time, NRMLA President Peter Bell emailed RMD to say that, “we have been actively engaged in consultation with Congressional staff to assure that provisions in H.R. 1728 that have been rolled into the bigger bill can work properly with reverse mortgages.”

Write to Reva Minkoff

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