The Fight for the CFPA Continues

From the Consumer Law & Policy Blog

The Times reports that President Obama met with Senator Dodd yesterday to push for the CFPA. Over the weekend, Times columnist Gretchen Morgenson wrote a piece, Credit Cards and Reluctant Regulators, about how credit card companies are doing an end run around the Credit CARD Act restraints and how it falls to the OCC, rather than a CFPA to protect consumers. The entire column is worth a read, but here's an excerpt:

[S]uch attempts by card issuers [should] be met with an aggressive regulatory response.

That, however, would be a lot to ask, given that the Office of the Comptroller of the Currency is tasked with enforcing the new rules at most card issuers. This institution not only failed in its oversight of risky practices at Citigroup, to cite just one case — it more recently objected to one of the sound credit card rules the Fed is putting into effect.

“The O.C.C. to the end fought the rules and tried to get huge exceptions, carrying water again for the large banks they were regulating,” said Travis B. Plunkett, legislative director for the Consumer Federation of America. “Now they have to enforce this law that they disagreed with.”

* * *

For years, consumer protection has been of little interest to the major financial regulatory agencies, with the exception of the F.D.I.C.

THERE is no reason to believe that this mind-set will change, given that the same folks who failed to rein in abusive practices years ago are still in place at these shops. And it is just plain boneheaded to entrust consumer protection to agencies run by people who seem to care more about the interests of the financial institutions they regulate.

Opponents of the Consumer Financial Protection Agency, which is part of the financial reform working its way through Congress, say that such a thing smacks of “the nanny state.” But isn’t that preferable to “the pirate state” that brought this economy to its knees?

More CFPA info

From http://www.uspirg.org/consumer-blog/consumer-blog/fight-to-save-the-cfpa-heats-up#1uziu6ds9Km3gdB8dzt3Ug

As newspapers continue to falsely report that the Consumer Financial Protection Agency is dead on arrival in the Senate, supporters of the agency are stepping up efforts to urge Chairman Chris Dodd (D-CT) of the Senate Banking Committee not to knuckle under to the bank lobbyists, who surely do want it dead. CFPA god-mother Elizabeth Warren issued a statement to supporters. [CLICK READ MORE for all links] Americans for Financial Reform issued a news release. Ralph Nader, a Connecticut native, sent Senator Dodd a strong letter supporting CFPA. Center for Responsible Lending made a video explaining why we need a consumer watchdog. Center for Media and Democracy and Banksterusa.org made a cute video urging Senator Dodd to dance with Main Street, not Wall Street. After you watch the video, sign the petition for strong reform and a strong CFPA.

From http://pubcit.typepad.com/clpblog/2010/01/consumer-financial-protection-agency-proposal-said-to-be-in-trouble-in-senate.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29

Consumer Financial Protection Agency Proposal Said to be in Trouble in Senate
by Jeff Sovern

The Wall Street Journal story is here. Senator Dodd is said to be willing to settle for a beefed-up consumer protection agency within another federal agency, perhaps the Treasury. Of course, the Office of the Comptroller of the Currency is such an agency, and it has been more of a hindrance to consumer protection than a help. Settling for such a half-step--and maybe it's not even that--would be a huge disappointment. The Huffington Post has Elizabeth Warren's take on this proposal and Reuters has this story on her reaction.