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Democrats Vote to Undermine Consumer Financial Protection Regulation


WASHINGTON, Oct 21 -

- During consideration of H.R. 3126, legislation to establish a Consumer Financial Protection Agency (CFPA), Democrats on the House Financial Services Committee voted against an amendment offered by Congressman Jeb Hensarling (R-TX) that would have ensured that consumers of financial products and services benefit from uniform national standards.  The amendment would also promote the safety and soundness of financial institutions and strengthen the dual banking system.

Uniform consumer protection laws for nationally chartered financial institutions have been cited as an important reason that consumers have seen a dramatic increase in access to credit over the past two decades.  The legislation creating a CFPA seeks to turn back the clock of regulation to a time when national markets did not exist.  Allowing 50 states and thousands of local governments to enact a patchwork of laws and ordinances that supersede federal law will dramatically increase costs for consumers, reduce consumer choice, and place U.S. companies at a competitive disadvantage.

The Hensarling amendment sought to remove provisions from the legislation that establish a Federal floor for CFPA regulations and allow states to adopt regulations on top of those issued by the CFPA.  Instead, Democrats voted to adopt an amendment by Congressmen Mel Watt (D-NC) and Dennis Moore (D-KS) that falls far short in providing the uniform standards needed for the smooth functioning of our national credit markets. The framework established by the Watt-Moore amendment guarantees that multiple state standards would continue apply to consumer banking activities. 

The vote on the Hensarling amendment was 29-38. Click here to view a copy of the Hensarling amendment.