Financial Lobbyist Group Executives Say Dodd's Proposal Needs Work

Ravi Bhatia - Talk Radio News Service

Bill Himpler, Executive Vice President of the American Financial Services Association (AFSA), a lobbying group based in Washington, D.C., said in a conference call with reporters Tuesday that consumers would face “regulation by anecdote as opposed to by hard, empirical evidence” under Senate Banking Committee Chairman Christopher Dodd's (D-Conn.) proposed Consumer Federal Protection Agency (CFPA).

The CFPA would independently oversee facets of consumer lending beyond just mortgages and credit, offering protections that parallel those offered by a similar proposal in the House Financial Services Committee, which passed its version in October. Dodd has said that he hopes his committee will begin writing a bill by the end of the month.


“What’s probably even more scary is that [the CFPA] creates a whole new category for reigning in products called an abusive standard,” Himpler said. “The problem, though, is that there’s no definition of what is abusive. There’s no standard for how the regulator is supposed to create that standard. Actually, there’s not even requirements for an actual regulatory process.”

AFSA President Chris Steinbert said he thinks introducing the CFPA at this time would create uncertainty in the marketplace.

“Would there really ever be a really good time to introduce this type of legislation?” he asked. “I'm not sure there is. Especially now, when we’re in a very, very sensitive time, when the capital markets are just starting to recover, when the securitization and corporate bonds are finally starting to rebound, when spreads are starting to narrow."