CFPA “lost its steam”
January 31, 2010 | federal legislation, industry | Comments (0)From today’s Washington Post:
The origin of the CFPA proposal may help explain why it has become so controversial. The idea for a new agency with broad powers to police the marketplace for borrowing — mortgages, credit cards, payday loans and other forms of consumer credit — came from a 2007 article that Harvard Law professor Elizabeth Warren wrote for Democracy, a liberal policy journal with a circulation of 5,000.
In June, the Obama administration adopted her concept for its package of regulatory reforms. Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) was an early supporter. He called consumer protection “our first priority” and urged approval of “an independent consumer protection agency whose sole focus is the financial well-being of consumers.”
But Sen. Richard C. Shelby (R-Ala.), the banking committee’s ranking Republican, said he wouldn’t support the creation of an independent agency, calling it “a folly and dangerous” and an expression of the paternalism he thinks government should avoid. Yet Shelby, who likes to call himself “something of a populist,” also said he favored new consumer protections. “Consumers are not likely to participate in our markets . . . unless they know they are protected against fraud and unfair dealings,” he said last summer.
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