Treasury Secretary Timothy Geithner told Congress last week that the new consumer financial protection agency that was formed by the Dodd-Frank financial reform legislation this past summer will not begin issuing new rules governing banks and other consumer financial entities until at least July 2011.
In light of President Obama's recent appointment of Harvard Law School Professor Elizabeth Warren as an interim adviser for the new agency, it was unclear how soon authority would be transferred from existing regulatory agencies to the new Consumer Financial Protection Bureau (CFPB).
Geithner said, "It is fair to say that until that authority is transferred, which will not happen before July of 2011, and before there is a confirmed director in place this agency by statute has very limited authority to actually write new rules."
Once the new agency is up and running, the CFPB will have broad rulemaking, examination and enforcement powers over numerous entities that offer consumer financial products and services to consumers, including banks, credit unions, mortgage loan originators, debt settlement companies, credit counselors, some attorneys and many others.
A more detailed discussion of the new legislation and the CFPB is available at www.loeb.com/newconsumerfinancialprotectionggency.
Loeb & Loeb's Financial Reform Task Force monitors key issues surrounding approval of the Dodd-Frank Wall Street Reform and Consumer Protection Act that are relevant to a broad spectrum of firm clients in the financial services industry. The multidisciplinary Task Force is comprised of attorneys across core practice areas - including general corporate, private equity, securities, mergers and acquisitions, consumer protection and banking and finance - who are focused on analyzing the historic legislation and interpreting the significant business implications for financial institutions and commercial companies nationwide. For more information about the content of this alert, please feel free to contact any member of our Financial Reform Task Force.
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