Rep. Minnick Proposes Scrapping CFPA, Embraces Chamber’s Consumer Protection Model

Rep. Walt Minnick (D-ID)

Rep. Walt Minnick (D-ID)

With the House’s financial regulatory reform effort set to come to the floor this week, attempts to derail the proposed Consumer Financial Protection Agency (CFPA) are once again picking up steam. For instance, the Chamber of Commerce has unveiled a new ad campaign attacking the CFPA, and Reuters reports that the Chamber “plans to spend ‘well more’ than its original estimate of $2 million to quash plans to create the new agency.”

Instead of the CFPA, the Chamber would like to see a consumer protection council, composed of the Federal Trade Commissioner and the heads of the already existing federal bank regulators. In short, the Chamber wants the same people who blew their consumer protection responsibilities in the buildup to the financial crisis to have a second chance at it.

But some in Congress are not as skeptical of this approach. One of the more than fifty proposed amendments to the regulatory reform effort comes from Rep. Walter Minnick (D-ID), who is embracing the Chamber’s model:

One key amendment to scrap the CFPA was proposed by moderate Democrats and led by Walt Minnick, a representative from Idaho. Mr Minnick, who has the support of Republicans, wants to replace the CFPA with a looser council of existing regulators.

According to National Journal, Minnick “held off offering the language in committee after [House Financial Services Chairman Barney] Frank expressed strong opposition.” This was for good reason, as we’ve already tried allowing the bank regulators to be responsible for both consumer protection and bank regulation. It certainly didn’t work. And making them sit together in a room once in a while as a “council” won’t remove the inherent tension between bank profits and consumer protection (as ripping off consumers is often highly profitable).

Minnick is not the only Democrat trying to bring an amendment to the floor that was held off in committee. As Mike Elk reported, Rep. Melissa Bean’s (D-IL) preemption amendment — which would prevent states from enacting consumer protections that go beyond the federal minimum — has also resurfaced, after she withdrew it from consideration during committee deliberations (partially due to her having to miss a committee meeting to handle a family illness). Hopefully, both of these ideas will finally meet their well-deserved ends, if they come up for a vote on the floor.