On Wednesday, a panel of banking experts expressed reservations over certain aspects of the regulatory reform proposals that the Obama administration has put forth.
In a hearing before the House Financial Services Committee, representatives from the financial services industry criticized plans to create a Consumer Financial Protection Agency.
In recent weeks, Committee Chairman Rep. Barney Frank (D-N.J.) cited a “flood of complaints” regarding practices in the financial industry. Rather than create laws to deal with each complaint, Frank has argued that conflict could be mitigated by a Consumer Financial Protection Agency.
Steve Bartlett, President and CEO of the Financial Services Roundtable, acknowledged that the “status quo is unacceptable,” and argued that regulation reform “should be comprehensive, should be systemic, and should be quite large in terms of its scope." He criticized the current system of regulation, which he said featured “hundreds of different agencies who regulate the same companies with the same activities in totally different ways based on different statutes, different standards.”
Bartlett nonetheless emphasized that he and his company “strongly oppose” the creation of a new agency, and recommended that Congress instead pass legislation enacting “strong national consumer protection standards.”
Steven Zeisel, Senior Counsel at the Consumer Bankers Association, said that he supported regulatory reform as well, but expressed reservations about the CFPA. He said that the legislation could require retail banks in different states to follow many different laws, which could make lending more complex, and could potentially the limit the availability of credit while raising costs for the consumer. He also said that the legislation will require banks “to offer products designed entirely by the federal government,” which could stifle innovation.
Rep. Scott Garrett (D-N.J.) said, “I don’t think Americans want government bureaucrats deciding if they are smart enough, sophisticated enough to take out a line of credit at the local retailer, or policing whether the credit cards that they choose offer reward points or not. When you come down to it, having choices is part of being an American.”
Rep. Maxine Walters (D-Calif.) harshly criticized the arguments of the panel. She said that they had “no real support for a consumer finance agency to protect consumers from these exotic products that worry us so much.” “You will work your magic with your influence in the Congress of the United States to keep any real strong legislation from ever coming out of here,” she continued. She also disputed the claim that the CFPA would raise consumer costs.
“I am just dumbfounded that we have before us representatives of the overall industry here today who do not appear to understand we have a crisis,” she said.
Bankers Welcome Regulation, But Skeptical Of Plans For Regulatory Agency
On Wednesday, a panel of banking experts expressed reservations over certain aspects of the regulatory reform proposals that the Obama administration has put forth.
In a hearing before the House Financial Services Committee, representatives from the financial services industry criticized plans to create a Consumer Financial Protection Agency.
In recent weeks, Committee Chairman Rep. Barney Frank (D-N.J.) cited a “flood of complaints” regarding practices in the financial industry. Rather than create laws to deal with each complaint, Frank has argued that conflict could be mitigated by a Consumer Financial Protection Agency.
Steve Bartlett, President and CEO of the Financial Services Roundtable, acknowledged that the “status quo is unacceptable,” and argued that regulation reform “should be comprehensive, should be systemic, and should be quite large in terms of its scope." He criticized the current system of regulation, which he said featured “hundreds of different agencies who regulate the same companies with the same activities in totally different ways based on different statutes, different standards.”
Bartlett nonetheless emphasized that he and his company “strongly oppose” the creation of a new agency, and recommended that Congress instead pass legislation enacting “strong national consumer protection standards.”
Steven Zeisel, Senior Counsel at the Consumer Bankers Association, said that he supported regulatory reform as well, but expressed reservations about the CFPA. He said that the legislation could require retail banks in different states to follow many different laws, which could make lending more complex, and could potentially the limit the availability of credit while raising costs for the consumer. He also said that the legislation will require banks “to offer products designed entirely by the federal government,” which could stifle innovation.
Rep. Scott Garrett (D-N.J.) said, “I don’t think Americans want government bureaucrats deciding if they are smart enough, sophisticated enough to take out a line of credit at the local retailer, or policing whether the credit cards that they choose offer reward points or not. When you come down to it, having choices is part of being an American.”
Rep. Maxine Walters (D-Calif.) harshly criticized the arguments of the panel. She said that they had “no real support for a consumer finance agency to protect consumers from these exotic products that worry us so much.” “You will work your magic with your influence in the Congress of the United States to keep any real strong legislation from ever coming out of here,” she continued. She also disputed the claim that the CFPA would raise consumer costs.
“I am just dumbfounded that we have before us representatives of the overall industry here today who do not appear to understand we have a crisis,” she said.