WASHINGTON, D.C. — Multiple news reports indicated that Senate Banking Committee Chairman Sen. Chris Dodd (D-CT) — in an effort to garner bipartisan support — is considering dropping the proposed Consumer Financial Protection Agency from legislation to reform U.S. financial regulation.

  After securing numerous compromises with moderate Democrats, the consumer agency is a key component of President Obama’s vision for regulatory reform. The Administration has repeatedly fought back attempts to eliminate the agency as a standalone entity.  Such an agency is seen by supporters as essential for protecting consumers against abuses in mortgages, credit cards and other forms of lending.

   The goal of its advocates is to separate consumer protection from banking regulation, giving regulators autonomy to write and enforce laws even over the objection of banking regulators

   The U.S. House of Representatives’ version of financial regulatory reform legislation, which passed in late December, included a standalone consumer protection agency.

   However, Republicans, including Banking Committee Ranking Member Sen. Richard Shelby of Alabama, have shown lockstep opposition to its creation, joining with banking industry officials who have long argued that a separate agency would create an unnecessary bureaucracy and stifle financial innovation.

   Without bipartisan support, Dodd may have trouble reaching the 60-vote threshold needed to overcome a filibuster and pass the bill through the Senate.

   Although the legislation is popular with voters and interest groups due to continued anger at Wall Street for its role in the financial crisis, election years are typically difficult times for controversial bills, especially ones opposed by the banking lobby, which donates heavily to both Republicans and Democrats.

   Janis Bowdler, deputy director with the National Council of La Raza, told Hispanic Link Jan. 26 that NCLR has gathered hundreds of signatures on a petition it is circulating in support of the bill.

   “NCLR supports a strong, independent CFPA that will hold the financial industry accountable for their impact on everyday Latinos. That status quo – where millions of Latinos are targeted by scammers and predatory lenders-is unacceptable. We plan to continue working with the Obama administration and the Senate to establish the strongest CFPA possible, “ she said.

   National Hispanic groups have particularly been supportive of the proposed agency.  In October, a coalition including NCLR, the United States Hispanic Chamber of Commerce and the National Hispanic Council of State Legislators wrote a letter of support for the consumer agency to Massachusetts Democrat Barney Frank who chairs the House Financial Services Committee.

   In the letter, the groups stress that “Hispanic individuals, families, communities and businesses across America often pay more for financial products with terms that put them at risk. This is in large part due to the absence of effective regulatory policy and oversight. The consequences of such predatory practices in the current economy include severe declines in Hispanic wealth and homeownership rates.”

   Senate talks on financial regulatory reform legislation are likely to pick up as Congress nears completion of its health care reform efforts.

   (Charlie Ericksen is publisher of Hispanic Link News Service in Washington, D.C. His email: [email protected].)