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December 4, 2009 - A comprehensive regulatory reform bill comprised of nine different pieces of legislation is expected to be debated by the House floor during the week of Dec. 7.
H.R. 4173, the Wall Street Reform and Consumer Protection Act, addresses systemic risk, “too big to fail” institutions, executive compensation, investor protection, credit rating agencies and the Consumer Financial Protection Agency (CFPA), among other financial reforms.
Throughout the Committee’s work, NASCUS directed legislators’ attention to state law issues and the importance of maintaining state regulatory authority. For example, the CFPA legislation directs the new agency to consult with state regulatory authorities in the exercise of the powers and decision making of the agency. The legislation as amended also includes a seat at the CFPA’s governing body for the FFIEC State Liaison Committee Chairman, a state regulator. In addition, the CFPA would establish a federal standard for consumer protection as “a floor and not a ceiling” allowing states with stronger consumer protection rules to continue to enforce those rules, as well as the federal standard.
Further, Chairman Barney Frank (D-Mass.) is expected to introduce an amendment on the House floor that would exempt all credit unions under $10 billion in assets from CFPA examinations. Currently, the legislation states that only credit unions under $1.5 billion in assets would continue to be examined by their prudential regulator for consumer protection.
Regarding systemic risk, H.R. 4173 would create a Financial Services Oversight Council to monitor systemic risk in the financial services arena. The chairmen of the federal banking agencies including the National Credit Union Administration are voting members of this Council. The Council would have an Advisory Board made up of a state bank supervisor and state insurance commissioner, both nonvoting members.
The legislation would establish a new process for winding down large, financially troubled non-bank institutions in a manner that does not impact taxpayers. In addition, it would impose higher scrutiny on bank holding companies and non-bank institutions.
To view the full legislation and for additional information, follow this link to the Committee’s website.
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