The Senate voted 61-38 against an amendment by Republican Sens. Richard Shelby of Alabama and Mitch McConnell of Kentucky that would have scaled back a new consumer protection bureau within the Federal Reserve to protect consumers from predatory lenders and abusive mortgage, credit card and other lending practices. Republicans, banking interests and some businesses have opposed the push.
The financial reform bill crafted by Sen. Christopher Dodd, D-Conn., creates an independent agency within the Fed to protect consumers. Republicans prefer a division within the Federal Deposit Insurance Corp. that would be subject to oversight from the FDIC's board of directors and with its scope limited to large mortgage originators, The Washington Post reported.
"That's where the target should lie -- not on the backs of America's small businesses and middle-class Americans who expected to be protected by this bill, not punished," McConnell said.