Senate Committee Near Agreement on Consumer Protection

Senate Banking Committee leaders are close to agreement on a way to enhance consumer protection as a part of a larger financial regulatory reform bill. "We are on the verge of getting a bi-partisan approach that appropriately enhances consumer protection," said Sen. Mark Warner, D-Va. "This is about to be a huge win for consumers," Sen. Warner said during a National Journal Live event held to discuss financial services reform. Sen. Bob Corker, R-Tenn., said the goal is to provide uniform regulation of consumer financial products that applies to everybody engaged in financial activities. "There are no carveouts for payday lenders," he said. "There are no carveouts for anybody." Sens. Corker and Warner indicated that enforcement would remain with the primary regulators. However, Sen. Warner stressed the need for "backup" enforcement authority if the current enforcement regime doesn't work. Banking Committee members are leaning toward housing the new consumer protection office at the Federal Reserve Board, despite its failure to curb abusive mortgage lending practices that contributed to the global financial crisis. "I know the Fed did a terrible job on consumer protection," Sen. Corker said. But he argued that it doesn't matter where it is housed. What is important is to enhance consumer protection and not "trump the safety and soundness of our financial system." Sen. Warner said he has concerns about the Fed. "I am not sure the Fed is the right place."