Will There be a Consumer Financial Protection Agency? October 14, 2009

Host: American Enterprise Institute. The Consumer Financial Protection Agency, one of the administration’s key initiatives for reforming the financial system, has encountered strong opposition on several fronts. Bank regulators have objected to removing consumer protection authority from their jurisdiction; banks and other financial institutions have also objected to the scope of the agency’s authority; and other critics have identified as serious flaws the agency’s power to approve a “plain vanilla” financial product and its failure to pre-empt state regulation. Consumer advocates, on the other hand, see the CFPA as addressing many of the problems that they believe gave rise to the financial crisis, particularly predatory lending. Representative Barney Frank (D-MA), the chair of the House Financial Services Committee, has proposed a revision of the administration’s plan that would sharply reduce the agency’s scope and eliminate the “plain vanilla” product; these changes have received a general endorsement from Treasury Secretary Timothy Geithner. With Chairman Frank’s changes, is the legislation now acceptable to its opponents, and does it go far enough to keep the support of consumer advocates?

Official Website: http://www.aei.org/event/100147