AlterNet-plank-Consumer Financial Protection Agency

==AlterNet Plank: A New Consumer Financial Protection Agency==
: source Zach Carter, AlterNet, November 2009
Subprime mortgages. Abusive and arbitrary rate hikes on your credit card. Payday loans. If you're wondering who lets banks get away with this crap, there are more people at it than you think. There are no less than four federal regulators responsible for overseeing consumer protection in finance, and all of them are terrible.
Regulators currently are responsible not only for keeping consumers safe from predation but for ensuring the "safety and soundness" of banks -- that is, keeping banks from failing.
Not surprisingly, sometimes what's best for bank balance sheets doesn't exactly jive with the interests of consumers. If banks can fend off failure by gouging you on your credit card, they're going to do it, and regulators aren't going to lift a finger to stop them.
What's worse, regulators actually compete to prove to banks how lax they can be at enforcing consumer protections. Each agency is funded by taxes it levies on banks it regulates, and banks can choose who they want to regulate them. If one agency is too tough, the bank can switch regulators. The result is a race-to-the bottom in regulatory standards where the interests of consumers are ignored.
The obvious solution is to give these consumer-protection responsibilities to a single regulator with no such conflicts and with the power to enforce uniform standards across the entire industry. That's what President Barack Obama proposed in June, and it was by far the most significant reform on his Wall Street agenda.
Unfortunately, the bank lobby has seriously watered down the bill in Congress. One of the chief advocates for the CFPA, Rep. Brad Miller, D-N.C., sponsored an amendment exempting 8,000 of the nation's 8,200 banks from the CFPA's oversight.
And it's getting worse -- the powers of the agency are being diminished with every committee. The latest one subjected the CFPA director to input from other commissioners and regulators from the same agencies that failed to prevent the current crisis.
These destructive amendments can be stripped out on the House floor, but only if Speaker Nancy Pelosi, D-Calif., has the political will to make it happen.
Category:Planks
Category:Finance