If the Democrats do not use this to illustrate that the GOP is categorically opposed to anything that favors the average American over corporations, they deserve to lose Congress.
Senate Republicans are determined to prevent the creation of an independent Consumer Financial Protection Agency because they consider it as threatening as their current arch-nemesis regulator: the Environmental Protection Agency. Consumer advocates, meanwhile, say the CFPA must have strong, independent authority to craft and enforce rules. Anything less, they argue, would be too much of a concession to banks that have gotten enough already.
"From the Republican point of view, the idea of a separate agency is still anathema," said Sen. Robert Bennett of Utah, a senior Republican on the banking committee. An independent agency, he said, can go too far in the direction of tight regulation without taking into account the effect of the rules it creates on business and the economy. He said he’s seen it happen before.
"Can you say EPA?" he asked, lifting his eyebrows. The Republican Party has regretted for years that President Richard Nixon made the EPA independent.
There’s been some movement: Republicans who once pushed for total elimination of the CFPA are now ready to back a compromise solution that would make the CFPA subservient to a larger financial regulatory agency, whose leadership could modify or eliminate any protections deemed hurtful to business.
"That doesn’t mean we’re opposed to consumer protection, but a single agency whose sole purpose is consumer protection would be really bad news," Bennett said. "I’ve served in the executive branch. I know what happens when the culture around a single mission takes over an agency. Republicans say that consumer protection has to be tied to regulation so the regulator who’s involved with regulation and consumer protection doesn’t go overboard in one direction or the other."
Supporters see the CFPA’s independence as essential. "For reform groups, this effort will not be successful without a stand-alone consumer agency. Putting consumer protection into a new, larger banking agency takes the failed structure of the Fed and the other existing banking agencies and consolidates it. These regulators repeatedly prioritized banks’ business practices over consumers’ financial security, and this proposal is a recipe for more of the same," said Graham Steele, policy counsel with Public Citizen’s Congress Watch.
Rep. Brad Miller (D-N.C.), who championed the CFPA in the House, where it passed as an independent agency, said that he wants an agency much stronger than the EPA.
