September 18, 2009
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Obama Refuses to Back Down on Consumer Protection Agency, Pt.2
A lot of money at stake.The arguments for and against Obama's proposed consumer protection agency are strong for both sides of the fence. Lenders and credit card companies say that if current regulators would increase staff levels by 10 to 15 to exercise the power they currently hold, the expense of setting up and maintaining a whole new agency would be not be needed. Additionally, banks and credit card companies maintain that such an agency would just bog up the system and increase lending costs. In their email, the U.S. Chamber stated that such an agency would be very dangerous. Its proposed powers would go beyond the new credit card reform act; it would span across a wide spectrum of financial transactions including Department Store lay-a-way plans and merchants who maintain an ongoing tab.
David Hirschmann, President of the U.S. Chamber's Center for Capital Markets stated that the agency's proposed scope of power is overwhelming. Lobbyists for the banks and credit card companies say yet another set of new regulations would make an already confusing system more complicated and increase credit costs to the housing market. However, supporters of the new consumer protection agency have been comparing these defensive tactics those of the credit card reform and health care debates. Elizabeth Warren, Chair of the Congressional Oversight Panel said these are just scare tactics and after reading the language herself, she can say for certain that the Chamber's arguments are unfounded. Furthermore, Warren says that lenders who participate in unfair and deceptive practices "there's a lot of money at stake."
The proposed agency would be granted increased power to oversee financial companies; levy increased power to the Federal Reserve in tightening up restrictions; and give additional power to the federal government in taking over failing companies. Democrats say the agency is a necessary addition to the credit card reform bill and critical to financial reform. President Obama will not back off and says that any attempt by lenders or opponents to kill the new proposed agency will be futile.