July 7,2009
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Consumer Finance Protection Agency, Pt.2
Why just one agency?So why have just one agency for credit card and consumer finance protection? The financial industry’s existing consumer protection spans across a wide range of legislation and involves several agencies who are often unaware of what the other agencies are doing. The new proposed agency is designed to reduce consumer risk involving credit cards, mortgages, loans, and various financial products and to centralize one place where consumers’ would know where to go for help or information. If the agency was given the requested powers, it would amend more than 20 credit card and lending laws including: The Alternative Mortgage Transaction Parity Act, Consumer Leasing Act of 1976, Electronic Funds Transfer Act, Equal Credit Opportunity Act, Federal Deposit Insurance Act, The Truth in Lending Act; Right to Financial Privacy Act of 1974, and the Federal Reserve Act
The new agency would consist of five U.S. citizens, a Director and four individuals that would be appointed by the President and approved by the Senate. All members are to have strong competencies and experiences in financial products or services including credit card products. Although the act is geared toward giving super powers to one financial agency, after close examination of the 150 page proposal, it is clear that the agency would really be carrying out the President’s platform. One could safely say that the new act would actually give the President more power than the agency itself. One could easily say that this agency is Obama’s guarantee that credit card reform will not fail.
Americans are expected to be affected in a number of ways if the new agency is established. Credit card rights would only play a small role in its responsibility. Some experts say the agency is nothing more than a new Federal trade commission that would establish rules and regulations that would essentially take years to accomplish. Such a delay in time would prevent any immediate action in implementing the measures to prevent unfair or deceptive practices.