AP: Senate GOP Proposes Alternate Consumer Financial Protection Plan

Senate GOP proposes alternate consumer plan

By JIM KUHNHENN
The Associated Press

Wednesday, May 5, 2010; 12:45 PM

WASHINGTON -- Opening a new front in the fight over Wall Street regulations, Senate Republicans want to reduce the power of a proposed consumer protection bureau by making its rules subject to approval by a top banking regulator.

The GOP plan ciruclating Wednesday would create a division of consumer protection within the Federal Deposit Insurance Corp. to oversee nonbank mortgage companies and write consumer regulations. The FDIC would have to sign off on those rules.

A Democratic plan backed by the Obama administration would create an independent bureau within the Federal Reserve to police lending and other customer financial service transactions. It would have a freer hand to enforce its regulations.

In another departure from the pending Democratic bill, the Republican plan also would continue the practice of having federal laws override state laws. Under the Democratic proposal, states would be allowed to write and enforce tougher laws, a provision opposed by the financial industry.

Creating a new consumer financial protection entity within the government is a central piece of the Obama administration's regulatory package. Obama has said he would veto legislation that contained consumer protections he deems too weak.

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http://www.washingtonpost.com/wp-dyn/content/article/2010/05/05/AR2010050500411.html