Chamber pushes Dems to cut new financial regulator's powers

The U.S. Chamber of Commerce will hold up a controversial amendment slated for House debate on Thursday as a banner issue for its organization.

The amendment would radically alter financial legislation by gutting a new federal agency charged with regulating consumer financial products.

A centerpiece of the legislation up for debate this week is a new Consumer Financial Protection Agency (CFPA), which would regulate products such as home loans and credit cards.

ADVERTISEMENT
Republicans and the financial industry have been overwhelmingly opposed to the CFPA agency, arguing that it is unnecessary and costly. Rep. Walt Minnick (D-Idaho) sponsored an amendment that would cut out the agency and replace it with a council of existing regulators, which consumer advocacy groups and a wide range of Democrats argue is too weak.

The Chamber has been running a multimillion-dollar campaign against the CFPA, and is going to key-vote it, said Eric Wohlschlegel, spokesman for the Chamber. That will raise the pressure on centrist Democrats and those in tough reelection campaigns to consider supporting the amendment and buck House leadership and President Barack Obama.

House Financial Services Committee Chairman Barney Frank (D-Mass.) said late on Wednesday that he thought the Minnick amendment would fail.

“Frankly, I think that will be defeated if it comes up," Frank said.

The Minnick amendment was one of a handful of contentious issues that House Democrats wrestled with on Wednesday.

House leaders and Treasury Department officials negotiated privately over a separate effort by New Democrats to limit the ability of state officials to go beyond the regulations proposed by the new CFPA. The issue of federal pre-emption dominated backroom discussions, with House Majority Leader Steny Hoyer (D-Md.) shuttling between Frank and New Democrats, particularly Rep. Melissa Bean (D-Ill.).

New Democrats had threatened to vote against the rule that allows debate to start. But late on Wednesday, House leaders reached a deal on the pre-emption issue. Banks and other financial interests lobbied heavily in favor of greater federal pre-emption.