Dodd Wimping Out on Consumer Financial Protection Agency (Told ya)

[Political Heretic]

Well, as much as Dodd was not as tough on banks as many would like, his lame duck status is turning Potemkin reforms into an utter joke.

The element of the proposed consumer financial protection agency that would have had a real impact on the predatory practices was the requirement to offer plain vanilla products. But nope, can’t have firms that enjoy extensive support by the state have their pillagingprofit seeking crimped in any way.

With Dodd on his way out, the consumer financial protection agency is likely to be folded into the Treasury, where it is certain to be neutered. The argument is that the operations of the to-be-created agency might conflict with those of the systemic risk regulator. Huh? First, I’d like to hear some hypothetical examples where the two might disagree. Seems to me safe retail products is pro-stability in the overwhelming majority of cases. Infrequent instances of friction between two agencies with distinct mandates is a pretty weak argument for neutering one of them. And if there were a bona fide tradeoff between consumer protection and stability, it might be salutary to have that conflict be explicit to force examination and debate.

To the news on Dodd, via the Wall Street Journal:

Senate Banking Committee Chairman Christopher Dodd is considering scrapping the idea of creating a Consumer Financial Protection Agency….

Mr. Dodd’s offer is conditional, however: Republicans must agree to create a beefed-up consumer-protection division within another federal agency…

http://www.nakedcapitalism.com/2010/01/dodd-wimping-out-on-consumer-financial-protection-agency.html

Yes, getting repubicans to agree to creating another consumer-protection division within treasury where it will be meaningless, why, that sounds like a great idea! :puke:

I told you a year ago that this is how it was going to work:

1. Reinflate the Wall Street Bubble and return to business as usual
2. Talk tough on Wall Street while giving them everything they want in order to put on a good show and tamp down popular outrage
3. Months later when everyone has moved on to other concerns, do effectively nothing to add anything other than a superficial layer of "for-show" so-called regulation

And before anyone attacks me, I'd like to point out that I WATCHED THIS EXACT THING HAPPEN during the Enron, Tyco, and about fifty other major corporation's scandal.

While the people were angry and paying attention, there was soaring tough talk about regulating businesses and changing the way things are done. Once the mission of that rhetoric was accomplished - which was to pacify the public and divert their attention - we got next to zero substantive reform and business returned to "normal" ...until the next time some major corporation gets caught.

[DJ13]

1. Sounds like he's afraid of upsetting a potential future employer

We really need to stop the revolving door.

[KoKo]

2. Just wait until we see his "New Job" after he leaves the Senate...

Many of us here will not be surprised.

[GeorgeGist]

3. Does this mean Geithner ...

will be spending more time with his family?