Stopping Unscrupulous and Fraudulent Financial Products

Today, House Financial Services Committee Chairman Barney Frank formally introduced a bill to implement President Obama's plan to strengthen consumer protections as a part of broader financial regulatory restructuring. The bill would establish a new independent agency, the Consumer Financial Protection Agency, which would have a range of rulemaking, information-gathering, supervisory, and enforcement tools to better protect consumers who purchase financial products from banks and non-bank financial institutions.

Chairman Barney Frank (D-MA):

I am pleased to introduce this bill which addresses an issue at the heart of the financial crisis. Recent reports about the lack of mortgage modifications and increases in various fees only reinforce the need for this bill, which is already very clear. I intend to mark this up by the end of July, and we have already begun to hold hearings on this subject and have had a great deal of consultation among members. I am confident that we will produce a bill that will provide greater consumer protections while in no way burdening the legitimate activities of responsible banking.

Reps. Maxine Waters (D-CA), Carolyn Maloney (D-NY), Luis Gutierrez (D-IL), Mel Watt (D-NC), Gary Ackerman (D-NY), Brad Sherman (D-CA), Michael Capuano (D-MA), Brad Miller (D-NC), Al Green (D-TX), Keith Ellison (D-MN), Jackie Speier (D-CA), and Alan Grayson (D-FL) joined Chairman Frank today as original co-sponsors of the bill.

Speaker Pelosi on the new legislation:

The financial crisis exposed consumer safety as a major gap in our system of financial regulation. Unscrupulous providers peddled exotic and risky, and sometimes fraudulent, financial products that consumers often didn't understand. We now know that these risky practices contributed to record foreclosures, a financial crisis of unprecedented proportions, and a recession we're still recovering from.

Today, Chairman Frank introduced the Obama Administration's proposal to consolidate in one agency the oversight, supervision, and regulation of retail financial products. This agency's main mandate will be to protect consumers, a responsibility that will not be watered down by competing regulatory priorities. This is the right thing to do for all the consumers who lost their homes and who were subject to abusive mortgage lending and credit card practices.

Congress will work in a bipartisan way and with the Obama Administration to constructively move forward essential reforms of financial regulation that will protect all consumers against future abuses.

Read the full text of the Consumer Financial Protection Agency Act of 2009 (H.R. 3126)>>