July 7,2009
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Consumer Finance Protection Agency, Pt.1
What do you think?I was on a mission recently to find out what Americans thought about President Obama's proposed Consumer Finance Protection Agency (CFPA.) I began asking the question "What do you think about Obama's new proposed agency?" To my surprise, I received a variety of answers which clearly indicated that most Americans have no knowledge of the proposed agency or what its function would be. Several individuals believed it was the new Credit Card Rights Act 2009 that the President signed into law in May. Others thought it pertained to the government banks bailout program. Still more believed its strictly related to credit card marketing targeting college students. Although, several individuals did touch on one of the various elements of the proposed agency, particularly those related to the credit card industry, it appears most consumers are not adequately informed on the agency's purpose.
It's true, the new proposed agency will have some connection to the credit card industry; however, its powers would extend far beyond that. The agency is considered by many as Obama's new watchdog agency. The President's aim is to consolidate accountability in one place and thereby limiting the possibility of important issues falling through the cracks. The agency would also provide greater transparency and clarity in information pertaining to financial products which include credit cards. Threw the powers of the agency, the financial industry would experience consistent regulation with a defined set of standards.
Of course, President Obama's mission for the new agency is basically to protect Americans from themselves. Credit card companies and other financial institutions such as mortgage lenders, have earned the reputation of taking advantage of consumers with deceptive and unfair practices. Mortgage lenders have carelessly approved loans to individuals that expand way above their means and ability to repay. Many have thrown in the towel through bankruptcy or foreclosures. All Americans should be aware of the consequences of the President's proposal and how the new agency would affect them.