President Obama this morning had harsh words for an amendment being offered by Sen. Dick Shelby, R-Ala., on an alternative to the Democrats’ proposed Consumer Financial Protection Agency. But White House officials wouldn’t say whether or not the president would veto the Wall Street reform bill if it contained the amendment.
Characterizing Shelby’s proposal as part of the panoply of “partisan attempts to obstruct progress and weaken reform” and “written by Wall Street’s lobbyists,” the president described his amendment as one that would “gut consumer protections and is worse than the status quo…This amendment will significantly weaken consumer protection oversight, includes dangerous carve outs for payday lenders, debt collectors, and other financial services operations, and hurts the ability of community and local banks to compete by creating an unlevel playing field with their non-bank competitors.”
But when asked if the president’s declaration “I will not allow amendments like this one written by Wall Street’s lobbyists to pass for reform” is a veto threat, White House officials would not say.
The proposal by Shelby, ranking Republican on the Senate Banking Committee, would place the proposed Consumer Financial Protection Agency within the FDIC instead of within the Federal Reserve, as the Democrats are proposing. Shelby would require that the FDIC sign-off on CFPA rules and would narrow the scope of the CFPA to financial institutions, nonbank mortgage companies and anyone with a pattern or practice of violating consumer financial protection statutes, like payday lenders. Further, Democrats would give the new agency the ability to collect consumer data in order to track financial products. Republicans would not.
At a Capitol Hill press conference Shelby called the agency as envisioned by Democrats a “massive new bureaucracy whose power and scope would have no equivalent in the US.”
On April 16, President Obama said he would “veto legislation that does not bring the derivatives market under control in some sort of regulatory framework and assures that we do not have the same sort of mess that we've seen in the past.”
- Jake Tapper and Z. Byron Wolf