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Both Consumer advocates and small businesses are concerned about a significant amendment that was included in the Senate financial reform bill. The amendment, created by Senator Olympia Snowe, was intended to benefit small businesses, but if it clears the House, it may end up hurting them.
The amendment would require the Consumer Financial Protection Bureau to to analyze the costs created by the regulation of credit firms. This would result in the CFPB being subject to the rules of the Small Business Regulatory Enforcement Fairness Act. Under the Act, regulations expected to have a significant economic impact on small entities first require a panel of government officials to convene and collect the opinions of those small business affected.
This situation has created the opportunity for a serious slow down, as well as a conflict of interest, as the panel would recieve input from the very industries they are meeting to regulate. The amendment, which was proposed by Senator Snowe, has many consumer advocate critics.
Said David Arkush, director of Public Citizen's Congress Watch, "You're talking about lenders, and in this case, you're talking about the worst of the worst -- check-cashing companies, payday lenders." In addition, as the New York Times blog reports, the Consumer Federation and the Public Citizen are opposed as well.
Ms. Snowe's amendment "would add at least two to six months, and possibly multiple years, to the rule-making process," wrote the Consumer Federation's top lobbyist, Travis Plunkett.
There does appear to be a reasonable possibility that the amendment will not make it though the House. "Given that the House wants a strong consumer protection agency," Mr. Arkush said, "I think there's a good chance it will be taken out or weakened."