Comments for Consumer Financial Protection Agency Gets Watered Down

Consumer Financial Protection Agency Gets Watered Down

2009-09-25T00:30:01Z

There's been so much resistance to the proposed Consumer Financial Protection Agency that Rep. Barney Frank, the chairman of the House Financial Services Committee, has proposed a less powerful version of the agency in an attempt to get it passed. Here's what's changed:

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No more requirement that banks offer "plain vanilla" loans for easy comparison shopping.
There would be a governing panel where banks could appeal rulings they don't agree with.
Non-financial companies like retailers, doctors, and auto dealers would be exempt from oversight.
The agency will have to be funded without imposing any new fees on banks.

Will this be enough to get the bill passed, and if so, will the CFPA still be powerful enough to police the financial industry? The American Bankers Association seems a lot happier with it, which doesn't sound like a good thing:

Edward Yingling, president of the American Bankers Association, welcomed what he called "significant improvements" in the legislation.

Yingling still isn't happy with the consumer agency, part of a sweeping overhaul of financial regulation in the wake of Wall Street's meltdown last year. He notes that the plan still lets states impose stricter consumer regulations if they want to. And he wants traditional bank regulatory agencies to keep their authority to regulate consumer finance.

But Frank wouldn't budge, saying the FDIC, comptroller of the currency and Federal Reserve had an "abysmal" record on protecting consumers: "They never cared about consumer affairs. ... They regard consumer affairs as a kind of nuisance."

"Plans for consumer shield pared back" [CNN Money]
"Consumer watchdog's 'draconian' powers scaled back" [USA Today]
(Photo: Andrew Ciscel)

Comment from YokoOhNo on 2009-09-28

2009-09-28T22:19:58Z

@corporatepoop:

If people need the government's protection from monopolistic and anti-trust activities they shouldn't be living in America.

Comment from rushevents on 2009-09-28

2009-09-28T20:31:44Z

@corporatepoop: "We're from the government and we're here to help you".

Sorry, I just don't believe anything that size and power will do anything but screw up and make everything more expensive.

So I vote NO on the CFPA!

Comment from mrearly2 on 2009-09-26

2009-09-26T08:46:26Z

Yeah, that's what we need, Faggy Frank--more government!

Comment from twophrasebark on 2009-09-26

2009-09-26T05:45:04Z

@MooseOfReason: So you're saying the banks have done a good job of regulating themselves? Is that what you're trying to say?

Comment from magus_melchior on 2009-09-25

2009-09-25T19:27:10Z

@AngryK9: Yeah, well, since Senators usually have a bit more clout than their House brethren, we shouldn't give Frank more than he deserves.

Put another way, not all politicians are equal, since the scope of the effects of their incompetence and/or malice is naturally different.

Comment from DragonThermo on 2009-09-25

2009-09-25T19:06:10Z

I don't get it. Democrats have a majority so where is this opposition they are referring to? Surely the Democrats can twist the arms of friendly RINOs to get whatever super-majority they need.

Plus, according to Barney Frank, we already have "the FDIC, comptroller of the currency and Federal Reserve" to regulate the financial industry. Why do we need YET ANOTHER government bureaucracy? Why can't Obama just appoint a Financial Protection Czar and avoid Congress altogether?

Comment from dragonfire81 on 2009-09-25

2009-09-25T10:01:47Z

@skizsrodt: Isn't the same true of health care as well?

Comment from Duckula22 on 2009-09-25

2009-09-25T09:37:24Z

All this $h1T would not be needed if people learned to live a life that would empower them instead, but noooooo... some fat ass chicks (just an example) will have as many kids as possible, no dad on sight, living paycheck to paycheck, and then they get in this vicious cycle, applying for loans over and over. Sometimes I feel these morons shouldn't be protected, heck... they make me feel like opening my own financial extortion office.

Comment from GuinevereRucker on 2009-09-25

2009-09-25T07:06:13Z

@Eyebrows McGee (now with more baby!): At least it's a start!

Comment from Eyebrows McGee (now with more baby!) on 2009-09-25

2009-09-25T06:11:23Z

@Persistence: Consumer education is required for graduation in Illinois, has been for more than 20 years, doesn't seem to do any good.

Comment from skizsrodt on 2009-09-24

2009-09-25T03:23:14Z

@NICU: I concur

Comment from skizsrodt on 2009-09-24

2009-09-25T03:21:46Z

@Persistence: The unfortunate thing about sending more money to the schools, is they'll waste it. The US has one of the highest per capita spending on education, yet comes in behind several other countries in results.

Comment from MooseOfReason on 2009-09-24

2009-09-25T02:58:20Z

@twophrasebark: Don't imply we've had laissez-faire capitalism all this time.

Comment from AngryK9 on 2009-09-24

2009-09-25T02:31:02Z

@magus_melchior: Yes, but he is a politician, which by it's very nature means he's just as crooked, senator or not.

Comment from AngryK9 on 2009-09-24

2009-09-25T02:29:10Z

"No more requirement that banks offer "plain vanilla" loans for easy comparison shopping."

In other words, the can continue to use underhanded fine-print tactics that they know nobody will catch since most don't read the fine print, or don't understand if they do read it, since it's always written in indecipherable legalese.

"There would be a governing panel where banks could appeal rulings they don't agree with."

In other words, a panel staffed by people on bank payrolls.

"Non-financial companies like retailers, doctors, and auto dealers would be exempt from oversight."

So they can continue placing unjustified price hikes on poor-quality goods and using underhanded fine-print tactics like banks do.

"The agency will have to be funded without imposing any new fees on banks."

Which means it will be funded by imposing those fees on the consumer.

Yessirree. Way to go Mr. Politician sir! I am glad to see that you are consistent in caving in to lobbyists and special interests!

Comment from ARP on 2009-09-24

2009-09-25T02:19:19Z

@nova3930: He had to water down the current legistlation partially due to lack of Republican support.

Comment from Tightlines on 2009-09-24

2009-09-25T01:41:55Z

@magus_melchior: Good catch.

Comment from NICU on 2009-09-24

2009-09-25T01:40:11Z

What BS, this organization would not have prevented the bank collapses. This will only grow the size and reach of the government at an enormous cost to tax payers. Adding one more regulatory body to a group that has failed miserably decade after decade will do absolutely nothing helpful to consumers, tax payers, or businesses.

Comment from magus_melchior on 2009-09-24

2009-09-25T01:38:24Z

There's been so much resistance to the proposed Consumer Financial Protection Agency that Sen. Barney Frank...

I think "Congressman" or "Rep." would be a better title, seeing as how he's not a Senator...

Comment from mac-phisto on 2009-09-24

2009-09-25T01:30:09Z

@Chumas: that's some good information right there. & i would also recommend that we all SPAM THE CRAP out of our senators - especially if they're on the senate banking committee.

or the chair (i'm looking at you, chris. you want my vote? start making some changes that bring NBs in line with our tough-as-nails state banking laws. or expect my vote to go to the other guy.)

Comment from Tightlines on 2009-09-24

2009-09-25T01:26:45Z

@nova3930: You go to war with the congressmen you have, not the congressmen you wish you had.

Comment from nova3930 on 2009-09-24

2009-09-25T01:19:18Z

I for one don't want Barney fing Frank anywhere near anything to do with finance. If there was every a more idiotic irresponsible ass I haven't seen him.

I still remember his comments and attempts to keep anybody at all from doing anything to reign in Fanny Mae and Freddy Mac, two really big players in the mortage mess who should have had oversight as gov't sponsored corps....

Comment from wagenejm on 2009-09-24

2009-09-25T01:18:09Z

@mac-phisto:

Careful what you wish
Careful what you say
Careful what you wish
You may regret it
Careful what you wish
You just might get it

Comment from Chumas on 2009-09-24

2009-09-25T01:12:21Z

I, for one, am sick and frikkin tired of industry lobbyists saying the god damned sky is green and the water tastes great. Fuck those chumps. Contact them and let them know how the people really think of what they are doing.

ABA Public Relations Contacts

American Bankers Association
1120 Connecticut Avenue, N.W.
Washington, DC 20036

1-800-BANKERS

Fax's: (202) 663-7578
[Please refrain from black faxing, it would be oh so wrong to do so.]

To ask questions of their lobbyists:

Jim Eberle
(202) 663-5477
jeberle@aba.com
Issues: mortgage lending, housing and real estate

Peter Garuccio
(202) 663-5452
pgarucci@aba.com
Issues: bank legislation, bankruptcy reform, bank regulation, credit cards, economic conditions, and government relations

John Hall
(202) 663-5473
jhall@aba.com
Issues: community banking, community development, and credit unions.

Carol Kaplan
(202) 663-5471
ckaplan@aba.com
Issues: bank employment, bank marketing, bank products and services, branches, consumer delinquencies, minority lending, retail and consumer banking trends, small business banking, securities, trusts and wealth management.

Margot Mohsberg
(202) 663-5470
mmohsber@aba.com
Issues: agricultural banking, ATMs, technology, back-office operations, bank security (including robberies), fraud and information security

Marquita Powell
ABA Education Foundation
(202) 663-5418
mpowell@aba.com
Issues: financial literacy, consumer education, Teach Children to Save Day and Get Smart About Credit program

Jon Snowling
(202) 663-5468
jsnowlin@aba.com
Issues: bank sale of insurance, corporate governance, international trade and banking, money laundering, tax and accounting and USA Patriot Act

Comment from twophrasebark on 2009-09-24

2009-09-25T01:07:36Z

But... but... banks have just done so well regulating themselves.

[cue laugh track]

Comment from wrjohnston19283 on 2009-09-24

2009-09-25T01:06:58Z

@Persistence:

Hopefully they won't be using readers to spellcheck the textbook.

Comment from chaoss13 on 2009-09-24

2009-09-25T01:06:44Z

@Persistence: The economics course I had in HS was a JOKE. A very sad one, too. I agree, though, that a proper education on businesses, economics and consumerism is a great idea.

Comment from ExtraCelestial on 2009-09-24

2009-09-25T01:05:37Z

@JGKojak: I'd like to agree, but I don't think the agency was very popular amongst Republicans.

And the Dems are too busy bickering about what shades of purple or blue they are to come together as a dominant majority for much of anything.

*sigh*

Comment from mac-phisto on 2009-09-24

2009-09-25T01:04:44Z

{Edward Yingling] wants traditional bank regulatory agencies to keep their authority to regulate consumer finance.

fine. let's take 6 months to study the rules in all the states & then we'll take the toughest rules from each of them, just so the ABA gets to keep their "one rulebook".

careful what you wish for, ed. you just might get it.

Comment from Persistence on 2009-09-24

2009-09-25T00:59:45Z

@Persistence: ...and maybe the staff at Consumerist can right the textbook for it...

Comment from Persistence on 2009-09-24

2009-09-25T00:58:27Z

Better still would be an increase in public education funding so that high school graduates are aware of all the ways businesses take advantage of consumers. There was no economics class required for graduation where I was, and there should be. It's more important than trig if you ask me.

Comment from JGKojak on 2009-09-24

2009-09-25T00:54:28Z

Come on...

Put the bill up for a vote and challenge anyone who wants to vote against it to enjoy the ad their opponent of either party will run against them in the next election.

Comment from corporatepoop on 2009-09-24

2009-09-25T00:54:13Z

This is quintessential politics, and sadly, the way the American political system was designed. Start with a bill, water it down to make everybody (or more likely, nobody) happy, and pass it, citing a victory. Health care will go this way too, sadly - no matter which side you are on, I have the feeling no one will be happy, except for the people that don't care. Sigh.