President Barack Obama is drawing a line in the sand on a new consumer financial protection office, saying it must have strong powers over non-banks as well as banks.
Obama said he would not accept legislation from Congress that exempts non-bank financial firms that Democrats and consumer advocates have long criticized for preying on consumers.
"I will not accept attempts to undermine the independence of the consumer protection agency, or to exclude from its purview banks, credit card companies or nonbank firms such as debt collectors, credit bureaus, payday lenders or auto dealers," Obama said in a statement.
Senate Banking Committee Chairman Chris Dodd (D-Conn.) unveiled legislation on Monday afternoon that would create a consumer office at the Federal Reserve that would have rule-writing powers over a great deal of the financial industry. The office would also have enforcement powers over banks and non-banks with at least $10 billion in assets.
Non-bank firms, such as auto dealers, lobbied aggressively in the House to be exempt from the reach of a consumer financial protection agency.