One of the key components of Wall Street regulation and reform, a National Financial Consumer Protection Agency, now appears dead in the water.
As we said in the story above, the idea for a one-stop-shop for national consumer protection was supported by a long list of academics (see a list of law professors supporting the idea here) as well as consumer advocates, from AARP to Consumers Union. (Read this article from MSN’s Liz Pulliam Weston) It was hated by the financial services industry and unsuppored by the majority of Republicans.
Those opposed should be happy: it looks like the bill, at least in it’s current form as passed by the house, has little chance of making it into law, especially now that Scott Brown has upset the Democratic super-majority in the senate.
The Consumer Financial Protection Agency Act of 2009 called for the creation of one agency that would regulate everything financial, from credit cards to mortgages to pawn shops and payday loan places. Currently, these industries are regulated by dozens of different agencies, but many believe a single agency with oversight of everything may be able to better serve consumers. You can read more about it in this article from Sourceswatch.
The argument of those opposed? The traditional Republican/Financial Services beef: more regulation is an unnecessary expense to American taxpayers. And more rules will simply result in making loans harder and more expensive to obtain.
Even before the defeat in Massachusetts, the opposition to the bill was causing Senate Banking Committee Chairman Christopher Dodd to rethink the idea of an independent consumer protection agency in a bid to rally conservative support for a broader financial regulatory revamp later this year. Here’s a Wall Street Journal article about that.
Bottom line? While it is now unlikely that there will be an independent Financial Consumer Protection Agency, there could still be legislation affecting regulation of financial services firms. Whether you think we need more or less protection from Wall Street, now’s the time to study the issue, form an opinion and take a stand.
Read about what’s happening. Contact your own representatives in Congress. (You can look them up on ContactingTheCongress.org.) Make your voice heard.