Despite a great deal of opposition from big-business lobbyists and right-wing politicians, the Consumer Financial Protection Agency (CFPA) has moved one step closer to seeing the light of day. The House Financial Services Committee, led by Chairman Barney Frank (D-Mass.), approved the CFPA's creation last Thursday and will now send the bill on to the full House. And while the legislation is definitely a more watered-down version than others introduced earlier this year, its supporters, including President Obama, seem quite pleased with the progress so far.
In fact, in response to the news regarding the committee's vote, Obama said "this bill has now passed a major hurdle, and this step sends an important signal to the American people that we will not stand by and allow big financial firms and their lobbyists to mobilize against change." "The Consumer Financial Protection Agency will prevent predatory lending practices and other abuses and will ensure that consumers get clear information they can understand about financial products like credit cards and mortgages," the president said. In reality, the CFPA has a long way to go before it emerges as the ultimate protector of American consumers from predatory lending. Exactly how much power it will yield and what types of financial products will fall within its scope are still very much up for grabs. Obama may get his new regulatory agency, but the brutal fight on Capitol Hill will likely force him to accept a CFPA that's significantly weaker than what he had imagined.
