Tepid applause
November 16, 2009 | federal legislation, industry | Comments (0)For Senator Dodd’s regulatory reforms. From the story:
Douglas Elliott, a fellow in economic studies at Washington’s Brookings Institution, a center-left research center, liked the idea of a separate consumer financial protection agency, but with reservations.
“Existing regulators did a terrible job,” he said. “And you can’t just say OK, we’ll change the people. There were also structural reasons” for the industry’s problems.
Financial regulators tend to look more at preserving the safety and soundness of financial institutions, he said, and that often conflicts with consumer interests. However, Elliott added, a separate consumer agency could overreach and “sometimes over-regulate to protect consumers from all risks.”
Opponents of a separate consumer agency agreed.
“The current debate should not be about more regulation, but smarter regulation,” said David Hirschmann, the U.S. Chamber of Commerce’s president for capital markets.
American Bankers Association spokesman Peter Garuccio argued it’s important for the same regulator to be able to consider an institution’s safety and soundness as well as consumer interests.
Transparency and disclosure would help consumers without hindering access to credit.
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