House committee gives nod to creating consumer financial protection agency

The House Financial Services Committee on Thursday took a major step forward by passing legislation that creates a new consumer financial protection agency.

The agency is a central plank in the Obama administration's plan to overhaul the financial system. The measure passed on a 39-29 vote. Reps. Walt Minnick (Idaho) and Travis Childers (Miss.) voted against the agency, the only Democrats opposed. Rep. Mike Castle (R-Del.) was the only Republican to vote in support. Castle is running for Vice President Joe Biden's old Senate seat.

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The agency proposal will head to a full House floor vote as early as mid-November, while action in the Senate may take longer.

The new agency would have power to regulate products such as home loans and credit cards, and has been vigorously opposed by the financial industry and Republicans.

The American Bankers Association (ABA), the nation's biggest banking lobby, applauded some of the changes to the bill, but remains opposed to the new agency.

President Barack Obama released a statement praising the panel and scolding the financial sector and its lobbyists for trying to block regulatory reform.

Big financial firms and their lobbyists are mobilizing against change, Obama said, "descending on Congress, using every bit of influence they have to maintain the status quo that has maximized their profits at the expense of American consumers, despite the fact that recently those same American consumers bailed them out as a consequence of the bad decisions that they made."

He said his administration would continue to work with Congress to create a consumer agency with "clear rules of the road for financial products and sufficient authority and resources to enforce those rules across the entire market."
 
 
This story was updated at 1:06 p.m.

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