WASHINGTON (9/24/09)--Rep. Barney Frank (D-Mass.) this week promised to propose revised legislation that would eliminate language that would require financial institutions to offer so-called “plain vanilla” financial products and prevent the proposed Consumer Financial Protection Agency from approving or changing the business plans of a financial institution under the agency’s oversight. H.R. 3216, the Consumer Financial Protection Agency (CFPA) Act, which would seek to protect consumers of financial products through the creation of a powerful independent agency with extensive rulemaking, oversight, and enforcement tools, was introduced by the Obama administration earlier this year. While Frank’s legislative changes, which have been circulated via a discussion draft, would still allow the CFPA to require financial institutions to provide improved disclosures to their consumers. However, non-financial businesses, including merchants, retailers, and other non-finance-related businesses would not come under the authority of the CFPA. Depository institutions would have the option of “simultaneous federal safety and soundness and consumer compliance examinations” to help minimize regulatory burdens born by financial institutions, and financial institutions that “receive contradictory or supervisory determinations” from the CFPA or other supervisors would be given an outlet to directly challenge any assessed deficiencies that are spotted by regulators. The CFPA would also be prevented from mandating a so-called “reasonableness standard” that would force financial institutions to assess whether or not a given consumer could understand the full terms of the financial products or services they are taking part in. Additionally, Frank’s proposal would fund the CFPA via the Federal Reserve, which would pay for the CFPA “at a level that reflects amounts the banking agencies currently pay for consumer compliance.” Non-banks would also be subject to assessments meant to fund the CFPA. However, financial institutions would not pay for the examination or supervision of non-financial entities. Frank earlier this year introduced a bill that would enact the Obama CFPA plan, with some changes, including postponing consideration of the merger of the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) into a prudential regulator, the National Bank Supervisory (NBS), as proposed in the Obama Administration’s original legislation, until a later date. The House Financial Services Committee, which Frank chairs, could soon mark up CFPA legislation, and Frank recently stated that other comprehensive financial regulatory reform legislation could be completed as soon as October, with a view toward signing it into law by the end of this year.