House committee delays consumer financial protection agency legislation

House committee delays consumer financial protection agency legislation

[JURIST] The US House Financial Services Committee [official website] on Tuesday delayed action on legislation [HR 3126 materials] that would create a consumer financial protection agency, slowing progress on a key Obama administration project. The delay was granted at the behest of financial industry leaders, who on Monday sent a letter [text, PDF] to the ranking members of the committee requesting a more measured approach to deliberations. The agency, proposed by the Obama administration [JURIST report] last month and put forth by Representative Barney Frank (D-MA) [official website], would assume significant oversight of the financial industry from the Federal Reserve, Federal Deposit Insurance Corporation, and Comptroller of Currency [official websites]. With the delay, the bill will not be the focus of House action until after the August recess.

Greater protection for consumers and regulation of the financial industry has been a priority of the Obama administration in the wake of the economic crisis of the past 16 months. In March, US Treasury Secretary Timothy Geithner [official profile] indicated that the Department of the Treasury [official website] would propose stronger rules [prepared remarks; JURIST report] in response to the current economic crisis, and called for both the Reserve and Treasury to be given broader powers. In February, Geithner had emphasized increasing restrictions on financial institutions [press release, JURIST report] receiving government assistance.