Wednesday, March 03, 2010
If you're a big bank, it makes perfectly good sense that the head of the U.S. banking cartel would continue in its role as the agency charged with watching out for the interests of the little guy. On the other hand, if you're the little guy, maybe it doesn't make sense for the Federal Reserve to be charged with protecting your interests, particularly since they hjaven't done such a good job in recent years.
This Bloomberg report has all the details on the latest developments on the "reform" of the banking system and how consumers are to be "protected":
For consumer advocates, housing a new agency to protect Americans from financial-product abuse within the Federal Reserve would be a defeat after lobbying for an independent body. For banks, it would represent a victory.Don't be surprised if the banks win - they always seem to.
Barney Frank, Chairman of the House Financial Services Committee, called a Senate plan to house the proposed Consumer Financial Protection Agency at the Fed “a joke.” Shielding consumers from harmful financial products is “the most conspicuous failure by the Fed,” Frank said in an interview yesterday.
Banks say placing the agency with the Fed alleviates their concern that an independent entity would ignore the health of the financial system. Consumer advocates say it’s a mistake because the Fed didn’t succeed in curbing abuses during the subprime lending boom that contributed to the worst financial crisis since the Great Depression.
The Obama administration’s proposal for a consumer protection agency is part of the biggest overhaul of financial regulation since the 1930s. Putting it inside the Fed, instead of creating a standalone bureau, was a compromise proposed by Senator Bob Corker, a Tennessee Republican, and Banking Committee Chairman Christopher Dodd, a Connecticut Democrat.