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National Consumer Protection Agency Facing Strong Opposition

Los Angeles Times, Monday, August 10, 2009 11 AM

Two basic bureaucratic realities are driving the push for a new Consumer Financial Protection Agency: 1. The priorities of agencies depend on who's in charge. 2. Regulatory agencies are designed primarily to monitor the economy and oversee the health of banks and other institutions, reports Jim Puzzanghera.

Supporters of a new agency say that the Fed and other regulatory agencies have a culture that puts those responsibilities ahead of protecting consumers. "[Consumer protection] is definitely second fiddle," agrees Ellen Seidman, a former director of the Office of Thrift Supervision.

Many Republicans and business groups believe that a new agency will add an unnecessary layer of bureaucracy and limit consumer access to credit by discouraging innovative loans and other financial products.

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