ETF News

US Rep hopes to kill state plan in consumer bill

WASHINGTON, Oct 12 (Reuters) - A Democratic lawmaker hopes to derail congressional efforts that would allow states to adopt stricter laws for firms offering mortgages and other financial products, a source familiar with the matter said on Monday.

Democratic Representative Melissa Bean could as early as Wednesday propose an amendment to a House of Representatives bill that would remove a provision giving states more rights over federal laws to protect consumers from risky financial products, the source said.

The House Financial Services Committee is considering legislation to overhaul the country’s financial regulatory system after lapses led to the credit crisis and broader economic meltdown.

The Democratic-led panel will take up amendments this week to the sweeping effort to create a Consumer Financial Protection Agency.

Bean’s planned amendment -- supported by U.S. businesses -- addresses one of the most controversial parts of the House bill.

It is unclear what action the committee chaired by Representative Barney Frank will take.

Frank has already killed the other controversial part of the bill that would have required banks to offer so-called plain vanilla versions of financial products, such as mortgages with simple terms.

Calls to Bean’s office were not immediately returned. (Reporting by Rachelle Younglai; editing by Andre Grenon)