Financial consumers would have fewer protections than originally envisioned under a draft of a bill being circulated on Capitol Hill.
The latest proposal for a Consumer Financial Protection Agency would no longer require financial institutions to offer a “plain vanilla” version of its products, such as a basic 30-year fixed rate mortgage. That would free lenders to concentrate on selling more sophisticated and expensive products.
The changes were proposed in a memo sent to Democratic members of the House Financial Services Committee on Tuesday evening by its chairman, Barney Frank.
The financial crisis sparked the idea for the agency, to make financial products safer for consumers. Advocates say such an agency could have prevented the subprime mortgage crisis and the resulting financial meltdown.
The agency would be able to examine and subpoena information from banks, while regulating financial tools such as mortgages and credit cards. Such an agency could determine the language on loan applications, how it’s presented and what the disclosure requirements are.
The new proposal would exempt non-bank businesses — such as merchants and retailers — from oversight. That means they could continue to offer customers tabs and layaway plans without facing a new layer of regulation, Frank’s memo said. Accountants, real estate brokers and agents also would be exempt.
Oddly enough, the banks are less than thrilled with the idea of this agency and would rather kill it outright.
Since when is a 30 year fixed more or less risky than some other product? There is very little “protection” in requiring this offering to be made unless the agency locked down the terms of said loan==and even then no protection.
Offering consumer’s choices is a type of “pro” consumer action, but its not protection.
“The creatures looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”
But, Democrats are on the side of the little guy, and control both houses and the Presidency!?!?!
This must be a mistake, only a Republican would vote for this kind of legislation.
The Obama admin is all talk and no action.
Obama as talked, promised and delivered great speeches but has not delivered anything significant and lasting that is different then the previous administration.
From Guantanamo to the Halls of the White House he has fought very to honor his pledges.
He is all Talk and No Fight.
Every once in a while, we get to see who really controls Washington.
And where are the wingnuts? The banks are preparing to screw us again and they’re running around babbling about ACORN.
We need to deregulate this industry.
“OH NO WE CAN’T DO THAT! THATS WHAT THEY WANT!”
No, it isn’t. I’m not talking about the crappy deregulation where banks get MORE special privileges in the marketplace…rather I’m talking about the kind deregulation that REMOVES their special privileges and forces them to compete or fail. Specifically remove their monopoly on entry into the market and also remove their monopoly on the issuance of money.
It’d also be helpful to sever the arbitrary link between savings and loan. Abolish the legitimacy of fractional reserve banking. etc.
There are several types of regulation and several types of deregulation.
– any single deregulation or regulation can either help or hurt the banking industry.
– Any single deregulation or regulation can also help or hurt the consumer.
It’s very important to understand that or we’re doomed to be a slave to special interests until the end of time.
It’s also important to note that banks throughout history have occasionally opposed legislation that would help them in order to spur support for that legislation. “The banks don’t like this legislation? I don’t know why but WE MUST pass this if the banks don’t like it!”
Any single piece of legislation should be considered on it’s own merits.
I am all for deregulating the banks. Just require a Federal usury law and a demand that government can not bail out the banks that fail.
I thought this had more legs. It sounded vague enough to sneak through Congress.
I am very surprised that the White House backed down.
Card Check – dead
Cap & Trade – dead
Save car industry – clunkerbama
Universal Health – on life support
Come January 1 next year, President Obama needs to show that he can accomplish something.
#8 Um, Benjamin, a federal usury law (by that I assume prohibiting excessive interest rates) is regulation, not deregulation.
Face it folks, we deregulated banks and other financial institutions, they got fancy, made all kinds of complicated financial instruments that even they didn’t understand, and it all came crashing down.
Banking needs to be regulated… even Alan Greenspan, a rabid free marketer, admitted that in Congressional hearings.
The question has always been do we want a robust economy with higher risk. Or a more sound economy with tighter lending practices? Obviously the investor potentially wants more risk. Get more money out there.
But as we have seen a tumbling economy can bring that down in a hurry.
The problem is our own government tries to stimulate things like home buying and such with lower lending standards. Is this a good ideal? Should we continue to artificially put people in homes who cannot afford them. In the end these bad loans end up hurting the taxpayer who ends up bailing out these banks and even those who over extended themselves financially. So where does it end?
#6, Amen, brother. I would propose that the regulation we need already exists — stopping fraud. It just isn’t enforced. If you are going to use taxpayer money to insure yourself, you will damn sure tow the line.
#8, It’s kinda in there now. Why do you think 90% of the population opposed it? I think it was illegal but you’ll not find a lawyer with a hair long enough on his ass that will challenge it.
#10, even Alan Greenspan, a rabid free marketer, admitted that in Congressional hearings.
If he were a “rabid free marketer” he wouldn’t have been such a staunch supporter of the Fed. No, Mr. Greenspan lost his way decades ago, being enticed by the open cookie jar.
DA nailed it on the head, IMO.
#13, um . . . that should be “toe” the line.
Poor libertarians. When faced with real-life problems, reduced to babbling nonsense. “It’s kinda in there now.” “I would propose…” You’re pulling that out of your ass because you can’t bring yourself to admit that sometimes, government regulation is the solution.
Friggin’ libertarians. The most useful dupes big corporations have ever had.
#15, BWAHAHAHAHA!
Partyliners. The most useful tools the establishment has ever had. They don’t have to think, just parrot.
Why don’t you pull your head out of your ass and take a look at what is going on around us. The system is broken. It’s not getting better.
Socio-Capitalism is a failure.
The only solution is pure Capitalism.
#17
Good job, you are completely correct to attack an ideology rather than to debate against me. You are way out of your league and you evidently recognized it.
Unfortunately, that doesn’t give you any legitimacy and makes you sound like a retarded partisan hack.
Government regulation is the solution when your dealing with government. When your dealing with the market, then market regulation is the answer…BUT YOU MUST REMOVE ALL SPECIAL PRIVILEGES. Since special interests have big lobbying budgets it’s only natural that the kind of deregulation they receive is beneficial to them.
If an ice cream shop is given the sole ability to give ice cream shop licenses in a city, and also has regulation to ensure that prices stay low. Then the ice cream shop goes to government and gets the price controls removed under the guise of “allowing competition” or something…wtf do you think is gonna happen? They have a monopoly control on the market, their is no free entry.
This is how deregulation fails. The solution is to remove that ice cream shops monopoly of licenses and in fact remove the requirement to be licensed at all.
This is how deregulation gets a bad rap.
This is how industries continually get more “regulation” and special privileges.
You must understand these things or we will be forever enslaved to the whims of special interests.
#16 The only solution is pure Capitalism.
Lordy, lordy, lordy.
#17 Agreed… the big money interests buy enough politicians, and create “regulation” that favors them. We need real regulation, that does what it’s supposed to do. Even the original capitalist economists like Adam Smith knew that enacting regulations to keep a fair playing field was essential to capitalism. But psst, don’t tell LL that, it’ll break his poor little heart.
Actually, I agree entirely with LL.
The market is capable of regulating, the governments role is to protect against FRAUD. Their has likely been tons of fraud and yet…nothing has been done.
It’s the market that figured out the corruption at Enron…government completely missed that, and in fact was largely involved in allowing it to happen and looking the other way.
Competition in the market place finds the corruption because they want to compete on a fair playing field. If a company is committing fraud the their competition will find them out. When there isn’t competition or the responsibility to find corruption is transferred to government, suddenly corruption grows. Government is the most corrupt system of all.
#19 What nonsense is this? The market is capable of regulating? So, we don’t need the EPA regulations to stop corporations from dumping toxic waste? We don’t need OSHA regulations to make sure corporations provide safe workplaces for their workers? We don’t need the FDA regulations to make sure food and drug producers are making safe products? We don’t need regulations on automakers to force them to make safe cars? All those and more regulatory functions of the government, you just want to go away, poof?
My bad. I thought you were talking sense. You’re as crazy as LL.
Wait wait… I get it! A car company that makes unsafe cars will kill all its customers, and so it’ll go out of business! The magic of the free market! Much better than the eeevul guvmint forcing them to make safe cars in the first place! What was I thinking? (slaps forehead)
#21 Yoohoo — Earth to DA — no company wants to compete on a fair playing field. That’s the most moronic thing you’ve said so far. Most companies would love to have a monopoly in their field so they can charge as much for their product and make as much money as possible. It’s up to an outside agent (psst… the government) to set up rules and regulations so companies are forced to compete. The founders of Capitalism knew that, why don’t you?
Jesus H. Christ on a pogo stick, you are as far out there as LL.
Sigh… I don’t know why I waste my time arguing with Libertarians. My bad for taking the bait. 🙂
#18, Even the original capitalist economists like Adam Smith knew that enacting regulations to keep a fair playing field was essential to capitalism.
Quoting Adam Smith as the example of what Austrian Economics is all about is like saying all we know about physics is what Einstein knew — the field has matured greatly since then.
Read something a little more modern, please.
‘The free market will sort everything out’ is a crock. Implying the less regulation the better the result. Leading to no regulation is the best.
I mean it’s trivially wrong.
It comes down to what are the purpose of companies? Sure to maximize the profit for their shareholders. But that’s under the assumption that as a side effect it maximizes the benefit for the people.
If the side effect is not to maximize the benefit for the people, then it’s not a good thing to have.
Regulation is required to cajole companies into benefit for the people. It’s not optional – its a requirement.
As an example. Here’s my company idea. I’m going to solve the US nuclear waste problem. I’m going to do it by dumping the nuclear waste in your backyard as there’s no pesky regulation. Done.
#23 Now see, this is when I start feeling sorry for the libertarians… they come back with weak sh*t like this. It’s almost like the fundie christians. Their beliefs are annoying and even destructive when they try to push them on other people, but it seems that believing their little fantasies is what keeps them going. And if you point out in too much detail how wrong they are, you feel like you’re kicking a little kid. Look, LL, if living in your little ideologically pure world makes you happy, great. Just don’t try to push it onto the rest of us, is all I’m saying.
#23 LibertyLover
I might regret this – but okay so what modern economic material should we be reading?
#20, So, we don’t need the EPA regulations to stop corporations from dumping toxic waste?
No. If it is truly a problem, sue the shit out the companies for violating your property rights.
We don’t need OSHA regulations to make sure corporations provide safe workplaces for their workers?
No. Unions should take care of this. If the workers truly demand a safe working environment, they will demand it or go on strike.
OSHA is a nanny-state org.
We don’t need the FDA regulations to make sure food and drug producers are making safe products?
Have you read the history of food regulations in the country? They were pushed by large cattle companies to keep foreign meat out of America. Free Trade? Hardly.
We don’t need regulations on automakers to force them to make safe cars?
If the companies were colluding with each other, whoever made the safer car wins.
I have no problem with the government setting standards (promoting the general welfare) but it is not the job to enforce standards.
#26, I might regret this – but okay so what modern economic material should we be reading?
http://mises.org/
#20 Phydeau said, “Wait wait… I get it! A car company that makes unsafe cars will kill all its customers, and so it’ll go out of business! The magic of the free market!”
Volvo did just that. They made safer cars and have safety conscience buyers when purchase cars from them. The market worked. Their cars are safer than government standards.
A lot of government regulation is stupid. They saw a problem and passed a law to fix it, but failed to see the unintended consequences of said regulation. Fraud is already illegal.
Prosecute those committing fraud. Make regulation apply to only those who are behaving irresponsibly. Don’t make regulations that put a higher burden on smaller companies. Large corporations like expensive to comply with regulations because they push out small businesses and reduce their competition.
I like the IDEA..
its cool.
you would THINK that a company/bank/insurance agency/Tobacco company would KNOW how to run a company..
that they would have the consumer as the MAIn concern..that they would bend over BACKWARDS to assist someone to HELP them pay their bills..
If this happens, the FED/GOV should NOT guarantee ANYTHING these guys do..
Can I get this much regulation on my SPENDING?? WOW, I would LOVE my CC card to have a COST over run guarantee..
If I CRASH my card, the GOV PAYS IT OFF for me…LOVE IT.
Anyone want to START A BANK with me??
#24, As an example. Here’s my company idea. I’m going to solve the US nuclear waste problem. I’m going to do it by dumping the nuclear waste in your backyard as there’s no pesky regulation. Done.
Nope. You would be shot on sight for trespassing and if you survived, sued for violating my property rights. Dump it down the street and you would sued by everybody in the neighborhood for violating their property rights.
Done.
#25, Phydeau said quit picking on me
I sorry. I didn’t mean to talk over your head.