Texas lawmakers reduced their own oversight of state financial agencies during the recently completed legislative session, citing the need to give the agencies more flexibility to address shifts in the economy.
They agreed to turn the three agencies that constitute the Texas Finance Commission into semi-independent agencies with substantially more autonomy. Supporters of the move say the current economic crisis revealed that the agencies were hamstrung by regulations as they sought to respond to developments quickly.
"Things in the financial industry can change fairly dramatically, and we need to respond as things change," Texas Banking Commissioner Charles Cooper said.
The move is a contrast to proposals being considered by federal lawmakers to increase the oversight of financial agencies like the Federal Reserve.
Supporters of the greater autonomy for agencies stress that the state’s financial regulators will still be subject to regular audits and other measures to keep them in check.
"We can always pull them back in if anything gets out of whack," said Rep. Vicki Truitt, R-Keller.
The Finance Commission is made up of three agencies that regulate thousands of companies in Texas, including state-chartered banks, mortgage brokers and lenders, pawnshops and motor vehicle dealers.
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