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June 29, 2009 at 08:00 PM
WASHINGTON BUREAU — The Treasury Department wants to create a Consumer Financial Protection Agency that would oversee “financial advisors” but would have only limited authority over insurance activities.
The CFPA would oversee insurance activities “usual in connection with extending credit or servicing loans,” such as the sale and servicing of credit insurance, mortgage insurance and title insurance, Treasury officials said today.
In other cases, the bill creating the CFPA would exclude “the business of insurance” from the definition of CFPA-regulated “financial activity.”
The agency’s mandate would be to “promote transparency, simplicity, fairness, accountability, and access in the market for consumer financial products and services.” The CFPA board would have 5 members, with 4 public members nominated by the president and confirmed by the Senate.
The Treasury Department submitted the proposed CFPA bill, the Consumer Financial Protection Agency Act of 2009, to Congress this morning.
Obama administration officials had suggested in earlier op-eds and comments that the CFPA might regulate annuities.
Although the bill text specifically excludes the “business of insurance” — other than credit, mortgage and title insurance – from the definition of CFPA-regulated financial activities, officials at the Association for Advanced Life Underwriting, Falls Church, Va., say they have questions about the implications of provisions concerning regulation of financial advisors.
