WASHINGTON -- Bank of America Corp. is breaking ranks with other large banks by supporting consumer-protection provisions in regulatory reform legislation, several sources said. The provision has been one of the most controversial elements in the reform effort, and the support of a large financial institution could help build momentum for the idea.
Until now, BoA has officially stayed neutral on a consumer protection unit, which has been fiercely opposed by the banking industry, which argues it could write rules that conflict with safety and soundness standards. But at a meeting with several community groups on Wednesday, top BoA executives said they were ready to give a consumer protection agency their support under certain conditions.
They said the new agency should focus on regulating by product, not company type, and cover non-banks and banks alike. Executives also emphasized that states should not be empowered to impose federal or state standards against national banks.
"We support the idea of a consumer protection entity, consistent with the principles of federal preemption, and believe that any new regulations should focus on activities that would apply evenly to all, rather than be focused on particular entities," a BoA spokesman said. But the spokesman emphasized the company was not supporting a particular bill.
The move by BoA could provide momentum to Senate Banking Committee Chairman Chris Dodd (D-Conn.)'s efforts to push his regulatory reform bill through the Senate this month.
But some consumer groups remained skeptical, noting the details for the planned Consumer Financial Protection Agency are still being hashed out by Dodd and the panel's ranking Republican, Sen. Richard Shelby of Alabama.
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