Congress moves to expand financial oversight

WASHINGTON – Oct. 22, 2009 – The House Financial Services Committee is on track to approve Thursday the creation of a new Consumer Financial Protection Agency that would regulate popular financial products like mortgages, credit cards and savings accounts.

The vote would be a victory for President Barack Obama, who has made the agency a top priority in his effort to tighten the rules governing Wall Street and prevent another economic crisis.

Democrats have hailed the plan and said the agency would help to reach across various businesses to stop fraud and abusive practices. That regulators didn’t monitor nonbank institutions like mortgage brokers was considered a major factor in subprime lending.

But under pressure from industry, the Financial Services Committee has carved out numerous exemptions to the industries subject to agency oversight. Among those exempt are retailers, real estate brokers, lawyers, cable companies and accountants.

Rep. Gwen Moore, a Democrat from Wisconsin with a major private mortgage insurer in her district, on Wednesday pushed though another exemption for credit, mortgage and title insurers.

Rep. Barney Frank, who chairs the panel, said exceptions were being made to clarify that the agency will monitor financial products and not every financial transaction made by the American public.

Copyright ©2009 The Associated Press, Anne Flaherty, Associated Press writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.