Reps. Frank, Waxman square off over new consumer agency

Democratic Reps. Henry Waxman and Barney Frank, powerful committee chairmen, are clashing over a bill that creates a consumer financial protection agency.

Waxman, chairman of the House Energy and Commerce Committee, wants the agency to be led by a five-member bipartisan commission. Frank, chairman of the House Financial Services Commission, strongly backs an agency with a single director at the helm.

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Having a commission with members appointed to staggered terms would make it less likely that the agency would be led by appointees from the same party. Creating an agency with a single director could give more power to the administration in office.

The debate of the leadership structure is central to the power and scope of the new Consumer Financial Protection Agency (CFPA), which would have regulatory responsibility over home loans, credit cards, and payday loans, among other financial products. The agency is one of the central planks of President Barack Obama’s effort to overhaul the financial regulatory system.

The Energy and Commerce Committee on Thursday will mark up the legislation, which was reported out of Frank’s committee last week after five days of debate.

Waxman and ranking member Rep. Joe Barton (Texas) are working on an amendment to the financial services bill that would set up a five-member bipartisan commission with members appointed by the president and confirmed by the Senate, according to a Democratic memo ahead of the markup. Commission members would hold staggered terms of five years.

Waxman and other committee Democrats said they were in support of the new agency but want it to be similar to other agencies that have commissioners, not directors.

“This needs to be an independent agency not an extension of any given administration,” a Democratic committee aide said on Wednesday.

Steve Adamske, spokesman for Frank, slammed the amendment.

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“We do not like that at all. We want there to be a single independent regulator much like what the banking regulators already are,” Adamske said. “We need a director who is able to come with a position of strength who can go toe-to-toe with the banking regulators.”

The Energy & Commerce Committee is marking up the bill because it has jurisdiction over the Federal Trade Commission (FTC). The bill would shift significant powers and staff from the trade commission to the new agency.

The financial industry and Republicans strongly oppose the new agency.