The Senate Committee on Banking, Housing and Urban Affairs heard testimony today from industry leaders on the proposed creation of the Consumer Financial Products Administration (CFPA), a new regulatory agency that would oversee financial products such as mortgages and other loans that are marketed and sold to consumers. Many voices applauded the need for the new agency, including Edward Yingling, the American Banking Association’s (ABA) president and CEO, who noted an estimate that 94% of the high cost mortgages occurred outside the regulated banking sector. “The most pressing need is to close the regulatory gaps outside of the banking industry through better supervision and regulation,” Yingling said in his testimony. “The need is for the same bank-like structure, supervision and examination to be applied to non-bank financial service providers.” Michael Barr, the assistant secretary for financial institutions at the US Department of Treasury, testified in a written statement that the new agency should establish a clear mission focus for a market-wide jurisdiction, which would prevent financial institutions from choosing a less restrictive regulator. Barr also suggested that that the new agency should consolidate regulation, supervision and enforcement. “The need could not be clearer,” Barr said. “Today’s consumer protection regime just experienced massive failure. It could not stem a plague of abusive and unaffordable mortgages and exploitative credit cards despite clear warning signs.” Others organizations urged Congress to confirm the CFPA as a new regulating agency of the financial market. In a report published on its Website, the Center for Responsible Lending blamed the Federal Reserve for turning a blind eye to shady loan practices in the mortgage industry. According the Center’s report, the Office of Thrift Supervision (OTS), the Office of the Comptroller of the Currency (OCC) and the Federal Reserve failed to protect consumers from unsuitable mortgage products. The Center’s report weilds hefty claims against the agencies, including ignoring regulations to oversee these products and impeding state law enforcement regarding mortgage lending. Spokespeople from both the OTS and OCC said they had not yet read the report, and the Fed did not return request for comment before this article went to press. Write to Jon Prior.