Bankruptcy

The Consumer Financial Protection Agency

By Adam Levitin

I've written a short research brief (also here) on the Obama administration's proposed Consumer Financial Protection Agency for the Pew Financial Reform Project.  The research brief is a non-partisan guide to the issues involved in creating a CFPA.  It begins by reviewing the current state of consumer protection in financial services and the criticisms of the current regulatory regime. It then considers how a CFPA would address the criticisms of the current regulatory system and concludes with a discussion of the potential concerns about a CFPA.

Many of the issues discussed in the research brief will be familiar to Credit Slips readers, but one thing that I believe is unique to the brief is a detailed examination of the supposed conflicts between safety-and-soundness and consumer protection.  While this has been raised as a general specter or with an analogy to the conflict between affordable housing regulation and safety-and-soundness in the case of Fannie Mae and Freddie Mac (more on that specific case in another post), precious few examples of potential conflicts have been put forth.  The research brief considers the specific examples that have been raised and demonstrates through examination of the proposed statutory languag they are for non-issues either because of the careful way in which the CFPA delegates authority. 

Full post as published by Credit Slips on August 11, 2009 (boomark / email).