Consumer Protection? Give it to the Fed, Naturally
The madness needs to stop and now. But it won't, of course, and there's absolutely nothing we can do about it.The CFPA idea isn't dead, exactly, it's just going to be handed over to the worst offenders, that's all.
h/t Naked Capitalism
The Federal Reserve would receive additional consumer protection responsibilities as part of a proposal circulated on Monday by Chris Dodd, the Senate banking committee chairman, in a surprising reversal of the central bank’s political fortunes.
The new division, if approved, falls short of an independent Consumer Financial Protection Agency originally proposed by the Treasury. Designed to regulate the sale of products such as credit cards and mortgages, the CFPA became one of President Barack Obama’s most cherished reform proposals.
Senior Republicans led by Richard Shelby, the senator from Alabama, are considering the proposal which, according to people involved with the negotiations, would see the Fed house a new semi-autonomous consumer protection division with rule-writing responsibilities.
Yves nails it at her NC post:
Congress was prepared to strip the Fed of some of its authority three years ago due to its abysmal failure to do anything about subprime abuses, even in the face of rising defaults, media coverage of fraud, and pressure from Capitol Hill. Now Dodd is prepared to reward the Fed for the very same conduct he roundly criticized three years ago. We can only assume he has already started serving his post-Congressional constituency.
Amen. Yves is a tad classier than yours truly, who will go ahead and say "Fuck this, Dodd's trying to make the last power move he can before he bails" because that's pretty much what we are dealing with here. No reason to mince words, it's pretty obvious, no?
Ryan Grim also hit it on Huffington Post:
Bipartisan negotiators are considering a plan that would house the CFPA in the Federal Reserve and give enforcement authority to banking regulators rather than consumer protection officials. Committee aides told HuffPost that there was much grumbling among progressive Democrats when they were briefed on the idea.
"Liberals never grumble. Never," quipped Dodd when asked by HuffPost about the progressives' concerns. He declined to comment on the status of negotiations.
Committee Democrats Chuck Schumer (N.Y.), Sherrod Brown (Ohio) and Jeff Merkley (Oregon) reacted coolly on Tuesday to the proposed compromise. Sen. Michael Bennet (D-Colo.) wouldn't respond to questions in the Capitol about the CFPA.
"Chairman Dodd is to be commended for working so diligently to come up with a bipartisan compromise on financial services reform, which demands urgent attention," said Schumer in a statement. "But in my 20 years of trying to get the Federal Reserve to properly protect consumers, it has been an uphill, and very often unsuccessful, battle. I am very leery of any consumer regulator being placed inside the Fed."
Liberals grumbling? That's when you know it's a terrible idea; normally they are so easily shoved around (see also: Nancy Pelosi selling her party to the wolves just to shove Obamacare through) one need not coerce anything out of them.
IMHO, Dodd should not be commended for a single thing, least of all handing off "consumer protection" to the worst-equipped agency he could have possibly come up with.
Good lookin' out, you prick.