Bank of America, Connecticut’s largest out-of-state bank, vowed that it won’t oppose President Barack Obama’s plan to create a Consumer Financial Protection Agency.
Chief Executive Officer Brian Moynihan informed White House and U.S. Treasury Department officials of the company’s stance last month, bank spokesman James Mahoney said in an interview this week. While not endorsing the agency, the Charlotte, N.C.-based bank agrees with the “policy direction,” Mahoney said.
“We’ve made it clear to various organizations of which we are part that we aren’t lobbying against the agency,” Mahoney said. The bank also isn’t promoting the concept, leaving the decision to Congress and federal agencies, he said.
The stance may put Moynihan at odds with rival bankers, whose lobbyists have spent millions of dollars to head off a new agency. Moynihan, 50, has sought to improve relations with regulators since taking over on Jan. 1 from Kenneth Lewis as CEO. Lewis clashed with U.S. officials over the bank’s $45 billion bailout and its takeover of Merrill Lynch & Co.
Officials at the Treasury who met with Moynihan were pleasantly surprised by the bank’s position, according to a department spokesperson. The Treasury is watching to see if groups that represent the company in Washington also refrain from opposing the new agency, the spokesperson said.
Moynihan wants regulators focused on making products and activities transparent, simple and fair without singling out one type of financial institution, Mahoney said. The bank opposes proposals that would allow state regulators to overrule federal guidelines, a process that would be inefficient for national banks, he said.
A House bill to overhaul bank regulations, approved in December without support from any Republicans, would create an agency empowered to ban financial products deemed too risky or abusive. Senate passage isn’t assured and Banking Committee Chairman Chris Dodd, D-Conn., and Sen. Richard Shelby, R-Ala., the committee’s ranking Republican, are discussing alternatives, the Washington Post reported Jan. 31, citing unnamed Senate sources.
Obama on Jan. 19 called the agency a “non- negotiable” part of his regulatory reform effort, while the Consumer Federation of America views it as “our top priority,” legislative director Travis Plunkett said. More than 200 consumer groups banded together to support the agency. (AP)
