A Sneaky Way to Gut Consumer Protections
The good news is that Senators seem resigned to creating a Consumer Financial Protection Agency (though the Senate bill calls it a Consumer Financial Protection “Bureau”). In December, when the House was considering financial reform, there was an amendment which would have gotten rid of the entire agency. Fortunately, this was defeated and there is no such amendment on the Senate side.
But Senators have come up with sneakier ways of gutting consumer protections. One way to do it is to take state cops off the consumer protection beat.
An amendment from Senator Carper (D, DE) would prevent state Attorneys General from enforcing the CFPA’s rules, and exempt national banks from state consumer protection laws. So, 98% of banks would be able to get around both state and national laws. As AFR puts it, “Carper Amendment #3949 is a stealth attempt to give banks immunity from consumer protection, taken directly from the bank lobbyists’ playbook.” Because after all, consumer protections aren’t any good if no one can enforce them.