While much of financial re-regulation deals with matters ordinary people never encounter, the Consumer Financial Protection Agency (CFPA) strikes to the heart of Main Street. This new agency would be charged with surveying the consumer finance landscape — from mortgages to credit cards — to make sure that the financial powers that be aren't selling predatory or otherwise unsound products. It would have the ability to write and enforce rules.
The House bill includes a stand-alone CFPA. The Senate bill would tuck the agency into the Federal Reserve, where it would technically still be independent, but might, CFPA proponents worry, come to take a back seat to the Fed's primary objectives of monetary policy and financial system stability.
Congress has stripped out much of what the Obama Administration originally proposed for the CFPA. For example, in the House bill auto dealers are specifically exempted. In neither bill is there a mandate for sellers of financial products to offer simple, no-frills versions of their wares. And banks with under $10 billion in assets — including most community banks and credit unions — wouldn't fall under the purview of the CFPA. The House bill does, however, include a series of amendments to the Truth in Lending Act in order to make mortgage industry practices more consumer-friendly. Among other things, the bill would require lenders to look at and verify documentation in order to determine that a borrower has a "reasonable ability to repay" his loan.