Death Knell for the CFPA

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Bad news on the financial regulation front:

Senate Banking Committee Chairman Christopher Dodd is considering scrapping the idea of creating a Consumer Financial Protection Agency, people familiar with the matter said, an initiative at the heart of the White House’s proposal to revamp financial-sector regulations.

….Mr. Dodd’s offer is conditional, however: Republicans must agree to create a beefed-up consumer-protection division within another federal agency, these people said.

….Bipartisan support is believed necessary to pass such legislation, as Democrats aren’t likely to get the 60 Senate votes needed to overcome a potential Republican filibuster. With Mr. Dodd no longer seeking re-election, some of the pressure to apply a populist stamp on new financial regulations has eased.

This is bad news on multiple fronts. First, although the CFPA isn’t a central part of the plumbing that might prevent a repeat of 2008, it was one of the few clean reforms still standing in the regulatory bills working their way through Congress. Second, I have my doubts that ditching it will gain any GOP support. They’ll just find other reasons to oppose reform. Third, it was one of the few parts of the reform effort that was genuinely understandable and popular with ordinary voters. Losing it means that regulatory reform is both weak and hard for most people to understand. Yuck. Dems would do better to keep it and force Republicans to vote against it. At least then they’d have a campaign issue.

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This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

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