Shelby Amendment Weakens Wall Street Regulations Bill

Update: Shelby's amendment is defeated 61-38, according to Politico.

The White House says Richard Shelby's new amendment to the financial reform bill would weaken consumer protection oversight.

A new amendment put forward by Senator Shelby on consumer financial protection would not just weaken the bill, it would weaken the status quo.

This new proposal keeps consumer protection oversight under banks' prudential supervisors, whose primary responsibility is safety and soundness of the bank, not consumer welfare. The record on this arrangement is unacceptable. WH

Harry Reid said the Senate will be considering more than 100 amendments, starting with Shelby's, over the next couple of days:

Senators have offered more than 130 amendments to the broad Wall Street reform bill.

Reid said the Senate would immediately consider an amendment offered by Sen. Richard Shelby (Ala.), the ranking Republican on the Banking Committee, and Senate Republican Leader Mitch McConnell (Ky.).

Reid said the chamber would then consider an amendment sponsored by Sen. Bernie Sanders (I-Vt.) that would require the Federal Reserve to submit to an audit by the Government Accountability Office.
The Hill

McConnell argues the democrats' Consumer Protection Bureau would be bad for small businesses:

The Shelby-McConnell amendment would establish a Division of Consumer Financial Protection within the Federal Deposit Insurance Corporation, replacing the Consumer Financial Protection Bureau that Democrats want to establish at the Federal Reserve.

During floor remarks, McConnell argued the Consumer Protection Bureau that Democrats favor at the Fed would ensnare a range of businesses in federal bureaucracy.

“We received a letter yesterday from groups representing hundreds of thousands of businesses — from florists to orthodontists to builders to car dealers — all concerned about the potential impact this new agency would have,” McConnell said. The Hill

The Senate has passed one amendment today. The amendment, which passed with flying colors, ensures that community banks pay a smaller share of FDIC insurance relative to big banks.
Update: Obama comes out strong against Shelby's amendment:

Nearly two years after the collapse on Wall Street that cost over 8 million jobs on Main Street, the American people deserve strong, tough reform that will help prevent another financial crisis. The bill before the Senate demands accountability from Wall Street and includes the strongest consumer protections ever.

Unfortunately, throughout this debate, there have been partisan attempts to obstruct progress and weaken reform. Today, the Senate is considering a Republican amendment that will gut consumer protections and is worse than the status quo. I will not allow amendments like this one written by Wall Street’s lobbyists to pass for reform. This amendment will significantly weaken consumer protection oversight, includes dangerous carve outs for payday lenders, debt collectors, and other financial services operations, and hurts the ability of community and local banks to compete by creating an unlevel playing field with their non-bank competitors.

As I have said throughout this process, I want to continue to work with Democrats and Republicans because protecting the American people should not be a partisan issue. But we must work together in good faith. Alternatives that gut consumer protections and do nothing to empower the American people by cracking down on unfair and predatory practices are unacceptable, and I urge the Senate to vote no on weakening consumer protections and instead stand with the American people.