Obama Administration Discusses New Financial Regulator To Protect Consumers
May 20th, 2009 | By Rob | Category: Government
Yesterday, when discussing the Senate’s credit card legislation, I was skeptical that the bill had done enough to level the balance of power between financial institutions and banks when it came to issues of credit card and debt contract terms and fees. Apparently, I wasn’t the only one to recognize that the legislation was only a good first start to increased credit card regulation.
Today, newspapers are reporting that President Obama’s administration is actively discussing the creation of a financial products regulator to act as a consumer protection agency related to mortgages, mutual funds, and credit cards. The announcement of the Obama consumer protection plan, as I have seen it called already, will likely be an opening salvo in the battle to increase regulation of financial institutions in the wake of the credit crunch.
Details for the new financial regulator are still murky, as the turf battle between government regulatory bodies to maintain their power is expected to be fierce. Already, the Securities and Exchange Commission Chairwoman has publicly questioned the transfer of some of the SEC’s consumer protection powers to a new regulatory body.
To get a better picture of the idea behind the proposal for a new financial watchdog, you should check out the work of Harvard Law Professor Elizabeth Warren, who has been given credit for the idea since she proposed a Financial Product Safety Commission to protect consumers engaging in financial transactions in 2007.
