DODD OUTLINES PLAN FOR INDEPENDENT CONSUMER PROTECTION AGENCY
Says Agency Should be the Foundation of Work to Modernize Financial Regulatory System
June 11, 2009
WASHINGTON, D.C. – Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, today announced that he believes any effort to reform the regulatory structure of the American financial system should include an independent consumer protection agency that will regulate credit and bank products and protect American consumers from predatory financial practices.
“The economic mess we’re in is rooted in a spectacular failure of consumer protection. For eight years under the Bush Administration, the cops on the beat went on a coffee break while millions of Americans were led into mortgages they couldn’t afford,” said Dodd. “If the financial crisis has proven one thing, it is that protecting the financial well-being of American consumers should be our first priority as we work to bring our financial regulatory structure into the 21st Century. I am committed to making this agency the centerpiece of my efforts as I work with President Obama and my colleagues to rebuild our financial architecture from the bottom up.”
Since the Banking Committee’s first hearing to examine the framework of the American financial regulatory system, Dodd has argued that robust consumer protections must be the foundation of any financial regulatory modernization proposal. Under his proposal, the consumer protection agency will be responsible for seeking out and putting an end to abusive financial practices. It will take on the consumer protection rulemaking authority currently held by the Federal Reserve, which failed for over 14 years to put an end to the predatory mortgage lending practices that led to the financial crisis.
Under Dodd’s proposal, the independent consumer protection agency will:
- Have broad regulatory and enforcement authority over credit and bank products;
- Be responsible for protecting consumers from predatory practices of payday lenders, mortgage brokers, banks, and other financial institutions;
- Will have a seat next to the safety and soundness regulators as part of a systemic risk council.