After several weeks of consideration, the House Financial Services Committee voted last week to support the creation of a new Consumer Financial Protection Agency (CFPA) that would regulate a host of financial products, including residential mortgages.
The 39-to-29 vote on the bill (H.R. 3126) prevailed largely along party lines, with two Democrats voting against the measure and only one Republican supporting the new agency. Chairman Barney Frank (D-Mass.) has indicated that he will bring a bill to the House floor sometime in November after combining this bill with a host of other financial regulatory reform proposals that have been considered by the committee this year.
Prior to the markup, NAHB sent a letter to every member of the committee expressing strong reservations over the impact that the creation of a new agency dedicated solely to consumer protection might have on today's impaired housing credit markets and on the cost and availability of mortgage credit for qualified buyers.
During consideration of H.R. 3126 in committee, a large number of Republican amendments aimed at addressing concerns over certain provisions in the bill were defeated. However, a handful of amendments responding to issues specifically cited in NAHB's letter did prevail. While some progress has been made, fears remain that the regulatory powers of the new agency are overly broad and ill-defined, to the possible detriment of access to consumer credit.
NAHB will continue to track this legislation closely as the final financial regulatory reform package is crafted by Chairman Frank and the House leadership in the coming weeks.
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