Bill Provides for Creation of Consumer Agency, But Little Else

The bill lays out an ambitious agenda for consumer protection, but leaves the new regulator on its own for how to accomplish those goals in addition to getting itself up and running.

Insurance Networking News, July 2, 2010

Cheyenne Hopkins

While passing a bill that would create a consumer protection agency has proved challenging enough, that task may pale in comparison to actually setting up the new regulator.

The regulatory reform bill lays out an ambitious agenda for the Consumer Financial Protection Bureau, including quickly detailing the scope of its powers and harmonizing regulations that implement two of the most complex lending laws on the books.

But the legislation largely leaves the new regulator on its own for how to accomplish those goals in addition to hiring needed personnel and getting itself up and running.

“While Congress has laid out the structure, it’s going to take a long time and be very complicated to translate the concept into something that works,” said Andrew Sandler, a partner at Buckley Sandler LLP.

Under the final bill, which was approved by the House this week but must still be passed by the Senate, the Treasury secretary must transfer consumer protection powers to the bureau between six months to a year after enactment of the legislation, with the option to extend it to 18 months if necessary.