Chamber attacks plan for consumer agency

The U.S. Chamber of Commerce is spending millions of dollars to attack the Obama administration’s plan for a new consumer financial protection agency, saying it would create an unnecessary bureaucracy that would go far beyond consumer protection.

“The Chamber supports strong consumer protection, but a massive new bureaucracy with sweeping powers that will deprive consumers of affordability and choice is not the answer,” said David Hirschmann, president and chief executive of the chamber’s Center for Capital Markets.

The administration says its proposed Consumer Financial Protection Agency (CFPA) would offer greater consumer protections for such financial products as mortgages, credit cards and loans by establishing simpler and more transparent rules and regulations.

The agency, if enacted by Congress, would consolidate many of the regulatory duties that are spread over several agencies, such as the Federal Reserve, the Office of Thrift Supervision, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp.

But Wall Street has argued that tighter controls and more regulations would stifle investments and innovation in the financial world and possibly slow down the flow of capital — a scenario blamed for the recent economic crisis.

The Chamber, the world’s largest business federation, representing 3 million businesses, said its multimillion-dollar campaign will include advertising, media outreach and grass-roots efforts.

The campaign will include an initial inside-the-Beltway push with print and online advertising, and will expand to television and radio advertising and “grass-roots mobilization” throughout the country.

President Obama has urged Congress to pass legislation to create the agency this year. House Financial Services Committee Chairman Barney Frank, Massachusetts Democrat, has promised that his panel soon would hold a vote on the measure.

But with Capitol Hill lawmakers dug in for a protracted fight over proposals to overhaul the nation’s health care system, and with pending legislation to curb the nation’s greenhouse gas emissions on the horizon, debate on the CFPA could be pushed off the legislative calendar for months.