Commercial Law League of America Opposes Creation of CFPA Regulatory Agency
Staff, Staff | March 02, 2010
The Commercial Law League of America is encouraging the Committee on Banking, Housing & Urban Affairs to abandon plans to give the proposed Consumer Financial Protection Agency (CFPA) the power to regulate attorneys.
In a letter sent last week to Committee on Banking, Housing & Urban Affairs chairman Sen. Christopher Dodd (D-Conn.), the CLLA’s Bankruptcy Section Legislative Committee noted that the current draft of the Title X Consumer Financial Protection Agency Act contains an exception that says the CFPA wouldn’t be authorized to prescribe rules for licensed attorneys.
However, for the exception to be valid, a consumer financial product or service must be within the relationship that the attorney has with a consumer. Because the CFPA will have the right to determine what is within the attorney-client relationship, the CLLA feels the exception is troubling.
The CLLA supports the current system, in which attorneys are subject to supervision and discipline by bar associations and courts at the state level, and does not recognize a need for federal regulation. It has strongly urged the Committee on Banking, Housing & Urban Affairs to remove the section involving the CFPA’s proposed regulatory powers to maintain and preserve the sanctity of the attorney-client relationship.
The CLLA’s Bankruptcy Section — which is comprised of approximately 500 bankruptcy lawyers and judges from across the U.S. — supports creditors’ efforts to seek distribution on their bankruptcy-related claims and works to promote fair and equitable bankruptcy policy.