On Thursday, the House Financial Services Committee plans to begin marking up legislation that will overhaul the nation’s financial regulations and create a new Consumer Financial Protection Agency (CFPA). It seems like the creation of this agency can’t come soon enough, as the New York Times reported today that many of the same subprime brokers “who dispensed risky mortgages during the real estate bubble have reconstituted themselves into a new industry” focused on selling bogus mortgage modifications.
However, Roll Call reported that Reps. Jeb Hensarling (R-TX) and Ed Royce (R-CA) have both said that they plan to obstruct the financial regulation legislation in committee:
GOP Reps. Ed Royce (Calif.) and Jeb Hensarling (Texas) plan to offer a barrage of amendments and rhetorical broadsides as the Financial Services Committee on Thursday begins marking up a bill to overhaul the rules governing the financial sector and create a powerful new regulator, the Consumer Financial Protection Agency. They stand little chance of defeating the legislation in committee — Democrats hold a double-digit advantage in seats on the Financial Services panel. But the conservative lawmakers will try to scale back the bill’s reach and use the markup as a forum for making their case for free markets and limited government oversight.
These are some of the same tactics that Republicans senators employed during their markup of health care legislation, offering unrelated amendments and an endless supply of free-market rhetoric to slow the process.
Roll Call noted that Hensarling is a protégé of former Sen. Phil “mental recession” Gramm and is “popular with the wealthy financial services industry, which could be a key source of campaign funds if he ever opts to run for the Senate.” In fact, Hensarling has received more than $2 million dollars from the finance, insurance, and real estate industries, which easily doubles the amount he’s received from any other sector. And Royce has done even better, taking in $2.5 million from the finance industry.
As the New York Times editorial board noted today, “banks and their minions in Congress have good reason to fear the proposed new agency.” It seems that Hensarling and Royce are ready to take the first stand against the agency on behalf of those banks.