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Senate plan would strip Fed of powerThe proposal released by Dodd, who is a Democratic Senator from Connecticut, would strip the Federal Reserve of much of its regulatory power, including overseeing consumers' interaction with companies that provide credit cards. Rather, the Senate's plan would put forward a Consumer Financial Protection Agency that would regulate loans and credit cards with the goal of guarding against predatory lenders. "We saw over the last number of years when they took on consumer protection responsibilities and the regulation of bank holding companies, it was an abysmal failure," Dodd said of the Fed. The bill would also create new mechanisms and agencies that would be in charge of overseeing the banking industry and take those responsibilities away from the Fed. For example, it would establish a Financial Institutions Regulatory Administration, which would oversee bank regulation. It would also eliminate the Office of the Comptroller of the Currency and the Office of Thrift Supervision, and would reduce the powers of the Federal Deposit Insurance Corporation. The Senate's plan differs from one proposed in the House, which would still have the Fed play a role in regulation. However, both plans include the idea of having the new consumer protection agency. The proposed changes from the House and Senate come as both bodies of Congress work to establish other consumer protections. For example, the House passed a bill that would speed up the effective dates for new credit card regulations, which the Senate will now consider.
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