Senate Banking Committee at Impasse over New Financial Consumer Protection Agency

This posting was written by Sarah Borchersen-Keto, CCH Washington Correspondent.

Democrats and Republicans on the Senate Banking Committee have failed to agree on the creation of a new financial consumer protection agency.

After reaching an impasse on the financial regulation overhaul with Ranking Member Richard Shelby (R-Alabama) on February 11, Committee Chairman Chris Dodd (D-Connecticut) tapped Senator Bob Corker (R-Tennessee) to lead negotiations on the Republican side.

The next day, Corker described the prospect of a stand-alone financial consumer protection agency as a “nonstarter.”

Corker said that consumer protection should be part of any financial regulatory reform package, but does not support the creation of a stand-alone agency for consumer protection. He suggested that the issue of consumer protection be set aside for the time being in order to focus on areas of consensus.

“I will work to see if we can find a way to enhance consumer protection without negatively impacting the safety and soundness of our financial system, and if we cannot, this will not be a bill I can support,” Corker stated. While agreeing to work with Dodd, he had not promised to support anything less than a reform bill that can attract bipartisan support.

Meanwhile, White House press spokesman Robert Gibbs reiterated President Obama’s support for strong consumer protection.

“The president still believes it is a great priority to have the independent authority to ensure that consumers in this reform are protected,” said Gibbs.

The spokesman failed to indicate whether President Obama would insist on the creation of a separate agency.

“Without knowing what exact vehicle might come in a bipartisan proposal from the Senate, obviously we would look at this assuming that strong consumer protections and authority was in that legislation.