STEVE INSKEEP, Host:
Congress is also working on plans to change financial industry rules. Yesterday, a key House panel approved a bill that would set up a new agency to regulate many types of consumer credit - from debit cards to payday loans. The bill has undergone changes though after intense lobbying from large banks, small banks, and nearly every potential creditor in between. NPR's Audie Cornish explains.
AUDIE CORNISH: Originally, it seemed that the proposed consumer financial protection agency would monitor everything from your car loan to your Starbucks card. But that's no longer the case. Barney Frank, chairman of the House Financial Services Committee, said the panel's work had sharpened the bill's focus.
CORNISH: We received a draft from the administration that I believe had some ambiguity. It was always my conception of this that the function of this agency would be to deal with lending activity.
CORNISH: So this week, lawmakers worked on making it much more clear what the agency covers, and what it doesn't.
INSKEEP: Conservative Democrats, and Republicans like Jeb Hensarling of Texas, tried to amend the bill to curb the proposed agency's powers.
CORNISH: We're dealing with a brand- new, huge federal agency that has the power to ban products. Consumer financial products impact 10 to 15 percent of the economy, cause unemployment, cause credit to be restricted, cause credit to be more expensive...
CORNISH: But Democrats, like Melvin Watt of North Carolina, said the agency must be equal to the other banking watchdogs to make a difference.
CORNISH: We shouldn't be creating a second-class agency, because we send the exact wrong message to the American people, that they as consumers are less important than everything else that we are doing here.
CORNISH: Watt helped craft one the bill's key compromises. It checks the ability of states to write stronger consumer rules than federal regulators.
INSKEEP: Despite the compromises, Chairman Frank says Democrats got what they wanted - a stand-alone agency that takes full responsibility for protecting consumers.
CORNISH: Given the process and what we were up against, I think it is a very significant advance. And I will predict it will only get better from our standpoint going further.
CORNISH: Audie Cornish, NPR News, the Capitol.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.