Yesterday the House Financial Services Committee approved legislation that would create the much anticipated Consumer Financial Protection Agency (CFPA). Though the process is far from over, as it looks now, the CFPA would bring financial products from payday loans to credit cards to mortgages under one federal regulator. It would not, however, have power over auto financing by auto dealers.
As reported by the AP, the CFPA legislation passed an important hurdle, but much debate remains before it becomes a reality. Though details could very well change when the full House and the Senate get their hands on it, the legislation approved yesterday shows who at least won this round of battle.
Here is some background about the fight for creating the CFPA. Here is a visual depiction of how CFPA proponents believe it could simplify the regulation of financial products.
So, what are the takeaways from the legislation approved yesterday?
While it will still face further wrangling within the House and Senate, CFPA proponents already faced an intense lobbying and PR assault by the banking and financial industry lobbies, as well as the US Chamber of Commerce (which spent $2 million in advertising against the CFPA, and launched stoptheCFPA.com).
The stage is now set for the next round of debate.