Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- U.S. House negotiators on Tuesday will seek to ensure that pay-day lenders, check cashers and other non-bank consumer lenders fall under the supervision of a new consumer financial watchdog.
In a proposal circulated by House Financial Services Chairman Barney Frank (D., Mass.) Monday, House negotiators are ready to concede that the new watchdog, created by the sweeping financial-overhaul bill, will be housed in the Federal Reserve rather than be a stand-alone agency, as in the House-passed bill.
But Frank's proposal asks for language to be added that would subject pay-day lenders, money remitters, check cashers and private student loan providers to supervision by the so-called Consumer Financial Protection Bureau.
At the same time, House lawmakers are seeking to exempt auto dealers and pawn brokers from the agency's reach.
While it's unclear why lawmakers want to exempt pawn brokers, the auto dealer exemption has been the target of months of intense lobbying by advocates and critics alike. The House bill that passed in December included the carve-out, but the amendment was opposed by a number of House Democrats now negotiating the final bill, including Frank.
The Senate bill didn't contain the auto-dealer exemption, though 60 senators voted to support a motion instructing the Senate negotiating team to support the exemption.
House negotiators must still vote to approve the offer circulated by Frank before its formally presented to Senate negotiators Tuesday. Members of the House team could try to change any of the proposals via amendment during debate on Tuesday.
The scope and power of the new consumer watchdog will be among the most hotly-debated issues of the so-called conference committee tasked with reconciling competing versions of the bill. It is scheduled to be debated Tuesday.
Copyright 2009 Dow Jones Newswires
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