July 7,2009

• Consumer Finance Protection Agency, Pt.4
    What are they saying?

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  Several opponents have spoken out against President Obama's proposed bill. Republicans in particular believe the new act would give the agency superpowers that could have some serious repercussions and limit options for home buyers and credit card consumers. Opponent's arguments provide no more clarity to their opposition of the new agency than they did with the recent debate over the credit card rights act. Their argument says the new agency would only serve to limit options for credit card customers, mortgage buyers, and other financial product sales. Additionally, opponents say such an agency would lead to consumer complacency in exercising proper judgment and making responsible decisions. They maintain that another layer of government regulation is unnecessary and potentially harmful to the consumer.

  In defense, the Treasury Department says the proposed act does not aim to rule with a clad iron fist or to impose additional burdens on the financial industry, but its aim is to protect the consumer from any institution that chooses to abuse their powers by taking advantage of the average American. The aim is to oversee activities and safeguard Americans from abusive lending practices regarding a variety of financial products including mortgages, credit cards, and checking and savings accounts. Such abusive actions as undocumented mortgage applications, lack of clarity in terms and conditions, and predatory credit card interest rates that added to the recent credit crisis.

  Representative Barney Frank (D-Mass), House Financial Services Committee Chairman plans to bring the proposal to a Congressional vote before the summer recess scheduled to begin August 3rd. Frank considers the agency to be “one of our highest priorities.” Over the past few weeks and during the next month, lobbyists, credit card companies and financial institutions have been coming forward voicing their opinions regarding the proposed new act. While proponents say consumer protection is at the heart of the new agency, opponents continue to say over and over again any such legislation would increase credit costs, stifle innovation and limited consumer choice. The act is scheduled to go before the Subcommittee on Commerce Trade and Consumer Protection on July 8th.

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