Thoughts on the Consumer Financial Protection Agency

From the ChamberPost (7/22/09)
By Brad Peck

The best news I received yesterday was the announcement that action on legislation to create a consumer financial protection agency has been delayed until September, quite frankly there were so many things wrong in the plan that I didn’t know where to begin, though David Chavern and Peter Wallison managed nicely. As does Rep. Jeb Hensarling today:

HR 3126 would create a new bureaucracy run by five unelected individuals appointed by the president. The ironically named Consumer Financial Protection Agency (CFPA) would have the power to strip from consumers their freedom of choice and restrict their credit opportunities in the midst of a financial recession — all in the name of “consumer protection.” Positively Orwellian.

Representing one of the great assaults on consumer rights (not to mention transfers of power from Congress to the executive branch), this agency would possess sweeping powers to ban or modify any home mortgage, credit card, personal loan or other “consumer financial product” it subjectively deems to be “unfair” or “abusive.” If the mortgage that would allow you to be a homeowner is deemed “unfair,” you’d better find another one. If the credit card you choose for your family is “abusive,” you might find yourself paying cash…

As with any transaction, the cornerstone of consumer protection must be personal responsibility. Through enhanced choice and a robust free market, we believe that well-informed consumers will always be the best judge of what financial products are appropriate for their needs, not a nanny-state government panel like the CFPA.

David Hirschmann was also pleased at the announcement:

The Chamber has been calling for better and more effective protection of consumers and welcomes Congressional efforts to achieve that goal. However, there has been growing concern among a diverse group of industries that current proposals would take away consumer choice, would give government unprecedented powers over American’s personal information, and open the flood gates to litigation abuse.

We will support efforts to insure consumers have the information they need and are protected from predatory and other illegal practices.  We will oppose efforts that fail to address the weaknesses of our current regulatory structure by simply adding new layers of government. We look forward to working with Congress on a plan that is clear and will actually help consumers.

As I’m sure the multi-industry signers of this letter were as well.  I mean you would have to be a partisan hack devoid of any sense of practicality to oppose a “thorough deliberative process.”

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