By Vicki Needham - 05/06/10 06:09 PM EDT
Consumers protections will be significantly weakened under a Republican proposal, President Barack Obama said Thursday.
Obama voiced his concerns that an amendment authored by leading Senate Republicans includes "dangerous carves outs for payday lenders, debt collectors," as debate in the Senate continued today on financial regulatory reform legislation.
The amendment authored by Senate Banking ranking member Richard Shelby (R-Ala.) and Senate Minority Leader Mitch McConnell (R-Ky.) "will gut consumer protections and is worse than the status quo," Obama said in a release.
The proposal "hurts the ability of community and local banks to compete by creating an unlevel playing field with their non-bank competitors," he said.
Republican are arguing that a Democratic proposal is too sweeping and corrals any small business that deals with credit while failing to let consumers make their own decisions.
Senate Banking Chairman Chris Dodd (D-Conn.) insisted that the Republican amendment would allow the wrong regulators to determine consumer protection, whose primary responsibility is the safety and soundness of banks not consumers. He said the proposal also calls for an assessment fee on community banks to pay for regulatory enforcement.
Obama said he wants to work with both parties on a solution but he won't tolerate alternatives that strip consumer protections and "do nothing to empower the American people by cracking down on unfair and predatory practices."