House Panel OKs Unfair-Practices Bill

The House Financial Services Committee has unanimously approved a bill that would give all the federal banking regulators the authority to adopt consumer protection rules that prohibit depository institutions from engaging in unfair and deceptive practices.The committee chairman, Rep. Barney Frank, D-Mass., has complained that banking regulators do not have the explicit authority to use their enforcement powers to protect consumers and says his bill corrects that anomaly. He noted that the Federal Reserve Board and the Office of Thrift Supervision already have authority to issue unfair-practices rules, but that only the OTS has taken the initial step of issuing a proposal to spells out specific unfair and deceptive lending practices for public comment. The bill (H.R. 3526) directs all the agencies -- including the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. -- to jointly or individually issue unfair-practices rules. "I think it is an important bill that really helps consumers and really helps regulation," said Rep. Carolyn Maloney, D-N.Y. Rep. Frank noted that all the banking agencies and the banking industry support the bill.