House Financial Services Committee Chairman Barney Frank (D-Mass.) said Wednesday he is open to placing a consumer financial protection authority at the Treasury Department instead of in a standalone office.
Consumer protection provisions have been the most contentious aspect of a yearlong financial overhaul debate, and senators have struggled over the last week to strike a bipartisan deal.
Senate Banking Committee Chairman Chris Dodd (D-Conn.) and Sen. Bob Corker (R-Tenn.) discussed putting a consumer office in the Federal Reserve, but Frank, liberal House and Senate members and consumer advocacy groups pushed back strongly on the possibility.
"I could, if necessary, support housing this important function in the Treasury Department, provided that the entity has sufficient independence and broad regulatory scope to accomplish the mission of protecting consumers," Frank said in a statement on Wednesday.
Republicans have been adamantly opposed to a standalone Consumer Financial Protection Agency (CFPA), as originally proposed by President Barack Obama, that would regulate home loans and credit cards. Republicans are concerned about the scope and power of a regulator that is not partnered with regulators responsible for overseeing the safety and soundness of banks.
Dodd at the end of last week circulated a proposal to place a consumer office in the Treasury Department, but it met strong opposition from Republicans who said they thought it would be politicized.
“My main objection to housing this critical function in the Federal Reserve has been the central bank’s historical failure to implement consumer protection as a central part of its mission and role," Frank said.