Financial Groups Mobilize Against Bill
Update: 5 p.m.
Just hours after Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) unveiled his financial services regulatory reform bill, business groups moved to oppose specific provisions in the legislation.
The National Association of Federal Credit Unions came out strongly against a provision on the proposed consumer protection agency that would include smaller depository institutions. NAFCU’s executive vice president of government affairs, Dan Berger, said that while the group applauds Dodd for trying to protect consumers, NAFCU will lobby for a change at the markup to raise the consumer protection agency’s examination and enforcement level to exclude institutions with $50 billion or less in assets. Dodd’s proposal calls for the consumer agency to have oversight of financial institutions with more than $10 billion in assets.
“Lumping credit unions in with payday lenders and other bad actors is not the best approach, especially when the two largest credit unions serve our brave men and women in uniform,” Berger said, referencing the Navy and Pentagon federal credit unions.
The Financial Services Roundtable continued its push against separating consumer oversight from the institutions that regulate them, such as the Treasury Department.
“The Roundtable believes that consumer protection should not be separated out from the regulators which govern the products,” FSR President and CEO Steve Bartlett said in a statement.
Bartlett, however, applauded Dodd on his efforts to streamline banking regulations and for proposals to keep banks from becoming too big to fail.
The insurance industry opposes a provision that would require the property-casualty industry to pay into a bailout fund for financial institutions on the brink of collapse.
“Legislation that proposes to prevent future crises by forcing property-casualty insurers to pay into a prefunded resolution mechanism or arbitrarily including insurers in a systemic risk regulatory regime penalizes stability, leading those same consumers and investors to unfairly conclude that the property-casualty sector is unstable and unreliable,” American Insurance Association CEO Leigh Ann Pusey said in a statement.
The opposition comes as Dodd is pushing to mark up the regulatory reform bill in the Banking panel next week.