House and Senate conferees today began the process of reconciling the two chambers' versions of the regulatory overhaul legislation.
While both Democrats and Republicans said they want final legislation that would strengthen consumer protection, they differed sharply on how to achieve it.
Senate Banking Committee Chairman Christopher Dodd (D-Conn.) said it would strengthen government's regulatory powers to "protect consumers from unsafe financial products, such as the subprime mortgages that led to the financial crisis."
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But Sen. Richard Shelby (R-Ala.) said that as a result of the legislation "the American economy will once again become the laboratory for another grand Democrat experiment in big government and central management."
One of the major differences that must be ironed out is on the structure of the new consumer financial products regulator. The House version creates it as an independent agency while the Senate bill houses it inside the Federal Reserve.
In a letter to conferees, NAFCU President/CEO Fred Becker endorsed the Senate version saying that it would "keep operational costs low and limit new agency overhead, while at the same time ensuring financial institutions will not have to pay assessments for its creation."
Under both the House and Senate versions, credit unions and other financial institutions with assets of $10 billion or less would have to comply with rules issued by the new regulator but the enforcement would be done by their safety and soundness regulator.
None of the conference committee members mentioned the amendment contained in the Senate version of the bill which authorizes the Federal Reserve to ensure that debit card fees are "reasonable and proportional," in relation to processing costs. It excludes credit unions and community banks with assets of less than $10 billion. It also allows merchants to set a minimum or maximum amount for each transaction and let them offer additional discounts for using a certain type of card or cash.
Credit unions and banks that oppose the amendment have mounted a heavy lobbying campaign in recent days as have retailers, who favor the amendment.
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