FDA is no model
May 4, 2010 | federal legislation, industry | Comments (0)From the National Review:
In this context, it is interesting to observe the debate around one element of the Democratic financial reform package: the creation of a new government institution, the Consumer Financial Protection Agency (CFPA), whose mandate would be to ensure that consumers aren’t duped by predatory lenders. The plan’s many critics, such as those at the Wall Street Journal, argue that the CFPA would (1) be redundant with existing government regulations and agencies; (2) place small community banks at a competitive disadvantage to the big “bulge-bracket” firms; (3) further tighten the supply of credit; (4) compromise important aspects of consumer privacy; (5) do nothing to address the actual causes of the 2008 crash.
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If a new medical therapy, in well-controlled trials, clearly demonstrates that it outperforms the prior standard of care, the FDA will approve the treatment. To do otherwise would make little sense. Similarly, if a drug performs worse than placebo, say by causing significant liver toxicity, the FDA will quite sensibly reject it. The FDA’s main regulatory role is to make objective assessments of factual clinical data. The same can’t be said of the proposed CFPA. Is there anything objective about the definition of “predatory lending,” especially in the current political climate?
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