Obama to Drop Push for Consumer Financial Protection Agency?
So says The Washington Post, reporting this morning that, for the sake of passing banking reforms this year, the White House is willing to drop its insistence on a stand-alone consumer protection agency — an idea championed by a number of consumer advocates, including Elizabeth Warren, who heads the TARP oversight committee.
President Obama’s economic team is now open to housing the consumer regulator inside another agency, such as the Treasury Department, though they still prefer a stand-alone agency. In either case, they are insisting on a regulator with political autonomy and real teeth so it can effectively enforce rules designed to protect consumers of mortgages, credit cards and other financial products.
Politically, this was probably inevitable. Republicans are unanimously opposed to a new stand-alone agency, arguing that it would represent just another lumbering bureaucracy incapable of tying its own shoes. They fear it would become the EPA of the finance world (i.e., that it would hinder companies’ ability to do exactly what they want). They aren’t going to vote for such a plan, particularly since Sen. Bob Corker (Tenn.) — the Republican leading the negotiations with Banking Committee Chairman Chris Dodd (D-Conn.) — is as adamantly opposed as the rest of his caucus.
Translation: The banks may be unpopular, and they may be the reason that the global economy collapsed, but their influence over lawmakers still ensures that they’ll get most of what they want on Capitol Hill.