Good questions
June 10, 2009 | Ohio, alternatives, federal legislation, personal finance, regulation | Comments (0)Robert Kuttner at the American Prospect poses some important questions about regulation of financial services, an issue we touched on in an earlier post. Here’s one key question from the story:
Should there be a Financial Product Safety Commission?
Elizabeth Warren, the Harvard law professor who also chairs the congressional oversight panel on the banking bailout program, has long advocated for a commission that would review and restrict potentially hazardous financial products such as sub-prime mortgages, deceptively priced payday loans, and other consumer rip-offs. The argument is that the banking agencies have paid too little attention to consumer welfare and that consumers need an agency that is their champion. The counterargument is that a new Financial Product Safety Commission would scramble lines of authority and that it’s better to strengthen bank regulators’ ability to safeguard consumer interests just as they assure bank soundness. Support for an FPSC is gaining strength in Congress.
Elizabeth Warren is no friend of the payday lending industry. She consistently (and weirdly) lumps the industry in with subprime mortgage lenders.
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