The House Financial Services Committee has approved the creation of a Consumer Financial Protection Agency by a vote of 39 to 29 to safeguard consumers against excessive credit card rate hikes, overdraft fees and predatory lending practices.

“We now have a stand-alone consumer protection agency that has very significant powers,” said Chairman Barney Frank, D-Mass.

The agency would be responsible for enforcing the Credit Cardholders Bill of Rights that was signed into law earlier this year, and the Mortgage Reform and Anti-Predatory Lending Law that has already passed the House.

The legislation is a major component of President Barack Obama’s financial regulatory overhaul. However, it also contains numerous exemptions for various industries, including accounting firms. The bill was the subject of an extensive lobbying campaign by the financial services and other industries. Also exempted are lawyers, retailers and gift cards, real estate brokers, automobile dealers, cable TV companies, and credit, mortgage and title insurers. Other exemptions are for small banks and credit unions, including lenders with up to $10 million in assets and credit unions with up to $1.5 billion in assets.

The committee eliminated several other provisions in the administration’s original proposed legislation, including a requirement that financial companies offer “plain vanilla” products such as 30-year fixed mortgages. The administration had also proposed that banks take steps to make sure that consumers understand the terms of what they are purchasing, but the committee decided that provision would be difficult to enforce.

The committee passed another component of the administration’s financial overhaul plan earlier this month with legislation to regulate the over-the-counter derivatives market (see House Panel Approves Derivatives Regulation Bill). That legislation too made compromises in response to industry pressure.

Other components of the financial regulatory reform plan still under debate involve the regulation of credit-rating agencies, say-on-pay legislation for executive compensation, the merger of the Office of Thrift Supervision with the Office of the Comptroller of the Currency, greater authority for the Federal Reserve, and the creation of a systemic risk regulator. The passage of the CFPA bill, however, is a significant step forward.

“The creation of the agency is part of a broader regulatory reform effort that we are working on with Congress to bring a new sense of responsibility and accountability to our financial system,” said Obama in a statement.

“This bill will create one agency focused on one simple mission—protecting consumers,” said Treasury Secretary Timothy Geithner. “While there is more work ahead, today we are much closer to putting in place strict new rules of the road for the financial industry.”

However, the Mortgage Bankers Association criticized the legislation. “We regret that the committee rejected an approach that would have ensured that the consumer protections contained within this bill, and those implemented by the CFPA, would be a uniform national standard that would apply to all borrowers, regardless of where they live,” the trade group said in a statement. “Instead the bill, as approved by the committee, would continue today’s patchwork of state and local laws that present implementation challenges for lenders who operate in multiple states and lead to increased costs for consumers.”

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