Consumer Protection Bill Sent to Congress

President Obama’s new consumer protection bill was sent to Congress today. The president says that the bill, which would create a Consumer Financial Protection Agency, would help protect consumers from corrupt business practices. It would do so by moving banks and non-banks onto the same level, enforcing the same rules between them all–allowing for fairness and more competition.

Mortgages would be monitored under the new agency, as well as payday loan providers, credit cards, and banking overdraft fees.

The bill is also supposed to help simplify financial product documentation.

In order to regulate these businesses, the new agency would have the authority to investigate any lenders, enforce penalties in cases of wrongdoing for up to $1 million per day, look into cases of possible discrimination against customers, and limit the pay of mortgage brokers and loan officers. In short, it would do what should have been done years ago–and what could have prevented the hot water we’re in right now.

But not everyone thinks so. Lending institutions are lobbying to oppose the bill, or at least scale it back, saying that the scope of it is simply too wide.

Edward L. Yingling, CEO of the American Bankers Association, says, “I think when people read this, they will be shocked about the incredibly broad delegation of power… I think there will be opposition simply on the breadth of it, on the balance of power between Congress and an agency.”

But perhaps, Mr. Yingling, people will instead finally feel a sense of relief due to the fact that their government is working for them instead of for businesses. Given that the industry has had such free range on public manipulation and swindling people for decades, such an “incredibly broad” measure is past due for America.