The winner of the Nobel Peace Prize gave another push this afternoon to his administration’s proposed Consumer Financial Protection Agency, with a speech at the White House. The only thing I heard that was really new was that he busted the chops of the U.S. Chamber of Commerce, saying one of its anti-CFPA ads—which claims that the agency will end up regulating your local butcher—was “completely false.” (The 0.05% of Americans who still get their meat from a local butcher breathed a great sigh of relief at that.)
Meanwhile, the Chamber sent out a press release before Obama’s speech saying they “disagree that a massive new federal agency with unprecedented powers over vast segments of the business community will be good for consumers, for America’s job creators or for the economy.” I don’t fully understand why the Chamber is getting itself so deep into this fight, considering that most of its members won’t be directly affected by the new agency. Maybe it’s a slippery-slope argument (“When they came for the dodgy mortgage lenders, I did nothing, for I was not a dodgy mortgage lender …”). Or maybe, as in their strangely hard stand on global warming, they’ve just decided that fighting is what good lobbying organizations do, even when many of their members don’t want them to.
As for the CPFA being massive, unprecedented and vast, as the Chamber claims, I think those are mainly meant as code words for looming socialist takeover. The reality of the CPFA is that it would take the consumer protection divisions of the existing banking regulators and consolidate them into one agency, which I don’t think would be particularly massive by Washington standards. The banks don’t like this mainly because they prefer being regulated by the existing agencies, which because they’re also out to keep banks safe and sound are presumably are more sympathetic to bankers’ concerns than a consumer agency would be. But the banks’ other concern is that the CPFA doesn’t go far enough—it doesn’t fully supplant the state regulators under whose jurisdiction mortgage brokers, check-cashing firms and other troublemakers (that happen to compete with banks) fall. Of course, if the CPFA did fully supplant the state regulators, it might actually have to be massive, unprecedented and vast.
As I’ve written before, I like the idea of the CPFA. That doesn’t mean there aren’t good arguments against it. You just don’t tend to hear them from the lobbying groups opposed to it.