- The Washington Times - Thursday, October 22, 2009

A key House committee on Thursday voted to approve the creation of a new federal agency to protect consumers against abuses in the financial world, though the bill still faces hurdles in the full House and Senate and stiff opposition from Wall Street.

The House Financial Services Committee voted 39-29 to support the proposed Consumer Financial Protection Agency — a key component of the Obama administration’s plans to reform the way the financial services sector does business.

The panel’s action brought swift praise from the White House.

“I congratulate the House Financial Services Committee and Chairman Barney Frank on passing a bill out of committee,” said Mr. Obama in a statement released minutes after the late-morning vote.

“This bill has now passed a major hurdle and this step sends an important signal to the American people that we will not stand by and allow big financial firms and their lobbyists to mobilize against change.”

The vote count was mostly along party lines. Democrats say the agency is necessary to protect consumers from abuses such as unscrupulous mortgage deals and excessive credit card rate increases, among other provisions.

But Republicans objected, saying that a new agency is not needed to push through reforms and only will create a needless new layer of government bureaucracy.

The panel’s action is a blow to Wall Street and industry groups, who argue that tighter controls and more regulations will stifle investments and innovation in the financial sector and possibly slow down the flow of capital — a scenario blamed for the recent economic crisis.

The measure now goes to the full House for a vote. The Senate has yet to act on the bill.

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