Senate Banking Committee Chairman Chris Dodd, D-Conn, has refuted claims by the U.S. Chamber of Commerce and Senate Republicans that a proposed Consumer Financial Protection Agency (CFPA) being considered as part of banking-reform legislation would subject small businesses such as orthodontists to new costs and oversight. The legislation being debated by Congress is aimed at preventing a recurrence of the banking crisis that crippled the nation’s financial system in 2008.

According to the Chamber, the new agency would have authority to regulate a significant portion of the business community—including nonfinancial businesses that had nothing to do with the economic crisis and little to do with consumer finance. Even orthodontists and others that allow their customers to pay over time could find themselves subject to new and costly regulations, the Chamber claims.

"The bill also creates a new, all-powerful super bureaucracy," said Senator David Vitter, R-La. "It subjects any business that accepts more than four installment payments to the [CFPA]. That’s not just Goldman Sachs; that’s not just Citigroup; that’s my family orthodontist."

Dodd countered that this is a misrepresentation of Democrats’ efforts "to bring accountability to Wall Street."

"[On Wednesday] the Republican Leader came to the Senate floor and repeated the Wall Street lobbyist claim that somehow the new consumer protection bureau would bring new regulation to orthodontists and others who simply allow customers to pay over time," said Dodd. "This new Bureau will protect consumers from abusive financial products and services like the outrageous practices we’ve seen by credit card companies, or the subprime mortgages that left millions in foreclosure and fueled the economic crisis." 

Dodd contended that the new agency would not cover orthodontists or other small businesses where extending a line of credit is incidental to their business.

"If your orthodontist, or doctor, or dentist lets you pay your bill over a series of months, they’re not covered…." said Dodd. "If you are just a business that has a loan process out there—one that is not your primary business—you’re not covered by the consumer-protection bureau."  
"Now, if you have a store credit card, that credit card falls under the same rules and regulations as a bank credit card," he added.