Opposition Grows Against New Consumer Financial Regulation Agency, Reports Pay1Day.com

QUITMAN, Miss., April 20 /PRNewswire/ -- Based on a NY Times article, "Consumer Financial Protection Agency: an overview," the creation of the Consumer Financial Protection Agency (CFPA) was marketed as a precautionary step to protect consumers from "predatory" lending practices, and to help avoid another economic meltdown, reports Pay1Day.com.  Protecting working class Americans after all, would be the primary function of this stand-alone agency so there wasn't much opposition to the proposed CFPA other than a few small business and alternative lenders, such as direct payday lenders, who feared the seemingly un-restricted power of a new regulatory body.  But now the opposition toward the creation of a stand-alone regulatory body seems to be gaining momentum every day as more and more details of the CFPA come under scrutiny of the media and other organizations.

For example, just recently the U.S. Chamber of Commerce announced that its grassroots efforts have succeeded in mobilizing small business owners, local chambers, and citizens to send more than 200,000 letters to their congressional members, voicing their strong opposition to the proposed (CFPA).  It also seems that small businesses specifically are reaching out to members of Congress to express disapproval of specific provisions that hurt them.  One of the primary concerns of these smaller businesses, who would possibly fall under the new proposed regulations, is that the new regulations would limit access to credit for them which could be detrimental to our economy's recovery and growth at this time.  Also, small businesses are not supporting these new regulations which are a direct result of the subprime mortgage meltdown that they did not cause.  

While it seems that smaller to mid-sized businesses are at the fore front of the opposition, many citizens seem to be opposed to the creation of a stand-alone regulatory agency, as opposed to investigating other options.  An article at the Denver Post states:

"Rather than creating a new financial watchdog agency within the Federal Reserve, why not strengthen the existing system?"

Why not, indeed?  It is hard to imagine that there is not a less costly alternative to consumer financial protection if it were to be housed within an existing government body such as the Federal Reserve.  And although consumers may need some financial "protection", it is unlike consumer protection regarding dangerous products or chemicals in such that financial terms and disclosures are readily available to help consumers make their own informed decisions.  

SOURCE Pay1Day.com