From Congresswoman Kay Granger
As you hear new information about the financial regulation bill that is making its way through Congress I want to continue to highlight parts of the legislation that could impact you and your familys financial lives.
Financial reform is complicated and can be difficult to explain. It could potentially cost our economy dearly. Today I want to tell you about a new government agency created in the bill called the Consumer Financial Protection Agency (CFPA).
The CFPA would have broad authority to set the terms of financial products and services such as buying a car taking out a student loan or buying a house. Any community bank auto dealer or small business that extends credit could be deemed dangerous to consumers by the CFPA and be branded as abusive.
This agency will inevitably not be immune from political influence. The agency would not have any direct jurisdiction over Wall Street. That is why big investment banks dont oppose the new agency. It does however have the ability to affect the financial products we all consume on a regular basis. Just imagine politicians in charge of allocating credit.
The new agency would be housed inside the Federal Reserve but that doesnt mean it would have adult supervision. The Federal Reserve will be prohibited from setting the CFPAs budget or controlling its director. The CFPA would have independent rule-making authority and other financial regulators responsible for safety and soundness could not easily block those rules.
If we have learned anything in the past two years it is that new agencies czars and bureaucracies dont reform a broken system. Our financial system will only be reformed when we fix what is truly broken.
