The Financial Times reports the Obama Administration “has sent Congress draft legislation for a new consumer financial protection agency, setting out the fine details it wants to see in the body responsible for regulating products such as credit cards and mortgages.” The agency “would have power over any company that sells financial products to consumers, including previously unregulated parts of the market such as some mortgage providers and ‘payday lenders.’” It would “set rules and have power to enforce them by issuing subpoenas, holding hearings and seeking court orders to halt abusive practices.”
The Associated Press reports that Obama “said Americans are demanding it. ‘Those ridiculous contracts with pages of fine print that no one can figure out – those things will be a thing of the past,’ the president said in a statement accompanying the 152-page draft bill.” The AP adds Republicans “and bankers, however, already are balking and gearing up for a fight.” But Tom Quaadman, executive director of the U.S. Chamber of Commerce’s center for capital markets, said, “This isn’t only bad government but big brother lurking at everyone’s doorstep.”
The New York Times reports, “Banks and mortgage lenders are placing top priority on killing President Obama’s proposal to create” the financial consumer protection agency. Industry executives “vowed on Tuesday to fight Mr. Obama’s plan with everything they have, even though banks are still heavily dependent on many taxpayer-supported loans and loan guarantees to get through the crisis.” The “industry’s heated reaction presages an intense lobbying battle that is already beginning.”
From the American Association for Justice news release.