This was a vote on an amendment offered by Rep. Minnick (D-ID) that would have moved the proposed new Consumer Financial Protection Agency into the Treasury Department, and required that the standards used by it be in accordance with those already used by the Federal Trade Commission.
The amendment was offered to H.R. 4173, a bill designed to implement the most significant regulatory reform of the financial industry since the Great Depression. H.R. 4173 also created the new Consumer Financial Protection Agency. The debate on the amendment focused on where in the federal bureaucracy the proposed new agency would be located and on what standards it would use to promote consumer projections.
Rep. Minnick began his statement in support of the amendment by saying “we all support the goal of stronger, more uniform consumer protection regulation. . . .” He then said “but you don't achieve that by splitting the responsibility between two regulators (the proposed new Consumer Financial Protection Agency and the existing Federal Trade Commission) . . . each with half the responsibility. And you compound that mistake by creating exemptions to the new regulation which create gaps and inconsistency . . . To split the responsibility between two inherently feuding regulators will lead to conflict, inaction, failure, and frustration.” Minnick claimed that the adoption of his amendment would create “a strong mandate for consumer protection in all of the existing regulators”.
Rep. Boren (D-OK), who supported the amendment, first acknowledged that the “need to reform the way America's banking and financial regulatory system is important.” He then said: “The question, though, is: Just how many new government agencies are necessary to accomplish this task? If we create a new federal agency to regulate consumer credit, will it improve the current regulatory framework or will it end up costing American jobs? I think we need to be cautious in our approach.”
Rep. Bean (D-IL) opposed the amendment. She said: “Reforming our financial system is vitally important to creating a functional, sustainable financial system that American families and businesses can count on. We must not fail to enact adequate safeguards (to prevent fraud and promote disclosure) so that the mistakes of the past do not reoccur . . . In order to accomplish this goal, we need an independent agency whose sole purpose is to protect and empower consumers to make informed financial decisions. The new Consumer Financial Protection Agency, would go a long way towards that end, restoring vital protections that were absent and duly needed during the buildup to America's recent financial fallout.”
Rep. Moore (D-KS) also opposed the amendment. He claimed that it would create “a bureaucratic nightmare.” Moore also suggested that making the changes proposed by the amendment would diminish the capacity of the proposed new agency to control the major institutions that contributed to the recent financial crisis.
The amendment was defeated by a vote of 208-223. One hundred and seventy-five Republicans and thirty-three Democrats voted “aye”. All two hundred and twenty-three “nay” votes were cast by Democrats, including a majority of the most progressive Members. As a result, no language was added to H.R. 4173 moving the proposed new Consumer Financial Protection Agency into the Treasury Department and requiring it to use the same standards as the Federal Trade Commission.