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Corker and the CFPA

By Matthew Yglesias  

"Corker and the CFPA"

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Felix Salmon on the latest contortions in the financial regulatory process is “if working with [Bob] Corker means losing the guts of the CFPA, it’s best to ditch him altogether and just try to push something through the Senate with the support of Democrats alone.”

The reality is that it’s pretty unambiguous that financial regulation isn’t eligible for reconciliation, so there’s no way you can “push something through the Senate with Democrats alone.” What I don’t understand is what the obsession is with roping the CFPA into a broader package. A Consumer Financial Protection Agency is vital to protecting consumers against abuses. The reason one is needed is that a systemic risk regulator won’t do this job. But by the same token, a CFPA isn’t going to regulate systemic risk. If Bob Corker does want to vote for a bill that handles systemic risk regulation and resolution authority of failed firms, then let’s write a bill that does those things and passes with Bob Corker’s support. If Corker doesn’t want to vote for a CFPA then let’s write a different bill to create a CFPA, have everyone go on TV and talk at rallies about how awesome it is, and maybe a Collins or a Snowe or a Brown will feel compelled to vote for it and it’ll pass or maybe they’ll all vote no and it won’t pass.

At a minimum, writing a CFPA bill and bringing it up for a vote will clarify who’s for it and who’s against it. We don’t need a rerun of the public option where somehow nobody’s against it but nobody will put it in the package. The issues CFPA is supposed to help with are quite distinct from the other questions the bill deals with, so why not deal with them separately?

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