Why Consumers Can’t Trust the Fed

[groovedaddy]

ON Monday, Senator Christopher Dodd unveiled his proposal to reform the nation’s financial regulatory system, including a new agency to protect consumers from predatory practices like teaser mortgages and misleading credit card contracts.

It’s a great idea, save for a fatal flaw. As a sop to Republicans, Senator Dodd’s plan lodges the agency in the very organization that dropped the ball in America’s consumer finance crisis: the Federal Reserve.

The Fed has a long and largely undistinguished history of consumer protection. During the 1970s, officials at the Fed opposed the Community Reinvestment Act, which attacked home lending discrimination, and the Home Mortgage Disclosure Act, which compelled banks to reveal their lending patterns.

When these became law, the Fed limply enforced them; it gave the same treatment to the Home Ownership Equity Protection Act, passed in 1994.

http://www.nytimes.com/2010/03/17/opinion/17Carpenter.html?th&emc=th

[kenny blankenship]

1. is the same reason can't trust the SEC, is the same reason they can't trust insurance "regulators"

The industry always captures its supposed regulators. It wines them it dines them it pays for them to attend symposia and seminars on the subject of regulation of said industry. It provides "employment opportunities" to the staff that make up that regulatory agency. It sets up a revolving door between itself and the government. It employs family members of the elected officials who sit on committees with oversight on that industry. It hires former elected officials who once "regulated" them to act as lobbyists.


It's a story as old as the Reagan Era itself, and you're about to see it repeated again in financial products and also in "regulated" health insurance. Corrupt, bought-off legislators enact corrupt, bought-off "regulation".