Dodd Limits on Enforcement and Rulemaking Authority Would Hamstring Consumer Financial Protection Regulator

WASHINGTON, March 16 /PRNewswire-USNewswire/ -- Consumer Watchdog's Washington Director, Carmen Balber, made the following comments on consumer protection in financial reform legislation proposed by Senate Banking Committee Chairman Chris Dodd.

"Legislation released by Chairman Dodd on consumer financial protection would hamstring a new consumer regulator by limiting its enforcement authority over all but the largest banks and mortgage companies, and giving existing regulators veto power over its rules.

"You can't pull an agency's teeth, and let other regulators tie its hands, and still call it an independent champion for consumers.

"The proposal also places the agency within the Federal Reserve, whose own consumer experts, past and present, rejected that idea in a letter to Chairman Dodd just last week.

"An autonomous regulator must have the authority to write rules without fear of rejection by existing regulators, whose refusal to enact consumer protection rules helped cause the financial crisis. An effective regulator must have the ability to enforce the rules that it writes or be little more than a paper tiger.

"We urge the Senate Banking Committee to ensure a new consumer financial regulator has the power and autonomy it needs to create fair rules of the road for all financial products and to crack down on any consumer abuses that threaten American homes, savings and economic security. The big bank lobbyists will notch a victory against consumers if these key components of an independent regulator aren't restored."

SOURCE Consumer Watchdog