BNA's Banking Report published an article, titled "Consumer Financial Protection: It’s a Smaller World After All," by Shearman & Sterling counsel Donald N. Lamson (Washington, DC-Financial Institutions Advisory & Financial Regulatory) and associate Hilary Allen (New York-Financial Institutions Advisory & Financial Regulatory) on March 22.

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Few of the reforms of the Dodd-Frank Wall Street Reform and Consumer Protection Act have been as controversial as the creation of the Consumer Financial Protection Bureau. On the one hand, proponents envisioned the Bureau as ‘‘a single, highly motivated federal regulator, [that would apply] the same regulation . . . to all similar products, regardless of the identity of the lender.’’ On the other hand, critics have called the Bureau ‘‘fatally flawed’’ and suggested that it has the potential to ‘‘stifle innovation and leave some market participants worse off.’’ As it turns out, the authority of the Bureau is not as monolithic as one might think after reading the headlines of the last several months. Beginning with the Obama Administration’s issuance of its white paper on financial regulatory reform, through the Administration’s subsequent legislative proposal, and ending with the House and Senate’s legislative efforts, the Bureau’s jurisdiction has been steadily eroded. To be sure, the authority of the Bureau should not be underestimated, for it is considerable. Still, it is useful to understand precisely what that authority encompasses and what has not changed since the issuance of the White Paper.

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