Creating Consumer Protection Bureau, No Easy Task

NewImage.jpgEven if Senate Democrats are able to get enough support from the other side of the aisle to pass Wall Street reform next week, creating the consumer protection agency will be no easy task.

The regulatory reform bill lays out an ambitious agenda for the Consumer Financial Protection Bureau, including quickly detailing the scope of its powers and harmonizing regulations that implement two of the most complex lending laws on the books says American Banker.

But the legislation largely leaves the new regulator on its own for how to accomplish those goals in addition to hiring needed personnel and getting itself up and running.

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“While Congress has laid out the structure, it’s going to take a long time and be very complicated to translate the concept into something that works,” said Andrew Sandler, a partner at Buckley Sandler LLP.

Under the final bill, which was approved by the House but must still be passed by the Senate, the Treasury secretary must transfer consumer protection powers to the bureau between six months to a year after enactment of the legislation, with the option to extend it to 18 months if necessary.

The bill directs the president to nominate a director, who must be confirmed by the Senate, and a deputy director. Until he or she is in place, the Treasury secretary would serve as interim director.

According to the Wall Street Journal, the director will add thousands of employees from existing agencies like the Federal Reserve’s consumer-affairs division, Federal Trade Commission, Comptroller of the Currency and Federal Deposit Insurance Corp—much as the larger Department of Homeland Security was created by melding dozens of existing agencies.

During a transition of up to 18 months, some employees will continue to work for their existing bosses to write and enforce consumer regulations. “The transition is going to be awkward,” said Cornelius Hurley, a former Fed lawyer who directs Boston University’s Morin Center for Banking and Financial Law. “The music doesn’t stop just because they pass the law,” he said.

The reverse mortgage industry will be paying close attention to how the agency is formed and operates since the bureau is required to conduct a reverse mortgage study to determine any deceptive or abusive practices within one year. Additionally it’s being asked to determine whether suitability standards are necessary, as well as safeguards to protect consumers from being sold reverse mortgages to fund inappropriate annuities, investments, and other financial products.

For New Consumer Protection Agency, No Shortage of Challenges

 

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  • Knowing something of how difficult it is to reorganize departments from existing departments, taking over existing responsibilities while at the same time organizing and fulfilling new responsibilities but on a much smaller scale, this task seems daunting. Why Congress added its reverse mortgage amendment to the bill with its separate deadline seems far more politically motivated than a reasoned and responsible mandate, especially since the new Director will not be starting on the first day of that one year timeline. What kind of product does Congress expect?

  • I put this out the other day as a press release, it ties in to the financial regulatory reform bill and the damage it will do.

    FOR IMEDITE RELEASE

    July 5, 2010

    A PLEA FOR HELP TO THE AMERICAN PEOPLE

    My fellow Americans,

    I want to reach out to all of you for help and to express my deepest concern over what is taken place in our great nation. I see us going further and further away from our values, our beliefs and what we knew as a free and prosperous nation.

    Wednesday evening, June 30th, the house passed the “Financial Regulatory Reform Bill” (H.R. 4173 Conference Report on Financial Reform).
    The bill still has to go to the senate for final passage. This is supposed to take place the week of July 12th.

    If this bill passes in its present form, it will be the largest transfer of power to the Federal Government in the history of our country. This bill MUST not pass!

    A sound financial regulatory reform bill is needed but not the way this 2,346 page bill is written. The passage of this bill, in its present form, means just about our entire financial industry can be controlled by the Federal Government.

    This means home loans, consumer loans, warehouse lending and traditional banks to main street will be severely damaged. These banks had nothing to do with causing the financial crisis but will be subject to 5,000 pages of new regulations. Consequently, many small banks will have to sell out to larger banks. They just do not have the staff to deal with the massive volume of new reports and rules to contend with. Each and every one of you will be impacted!

    The bill calls for a consumer protection bureau to be established, a committee of people that will have more power than one could imagine over our financial structure. Those of you that have had enough with government take over and government bankrupting this country need to take a stand on this bill.

    Everyone needs to write congressman and senators, not just your own, it is important to write to Democratic congressman and senators, mainly senators, if you want this bill stopped in its tracts.

    Those of you that disagree with me; I will respect your views but please check out the ramifications first. Those who do agree, get out your pens, computers, your phones and start charging forward.

    Also, please put this letter on your Facebook, Linked, and Twitter profile to your friends and contacts.

    I can’t stress the importance for everyone to take action on this critical bill; we only have less than a week to move on it.

    Thank you and God speed,

    John A. Smaldone
    865-983-5688
    johnsmaldone@charter.net
    http://www.USA-GodandCountry-Petition.com

  • I put this out the other day as a press release, it ties in to the financial regulatory reform bill and the damage it will do.rnrnFOR IMEDITE RELEASErnrnJuly 5, 2010rnrnA PLEA FOR HELP TO THE AMERICAN PEOPLErnrnMy fellow Americans,rnrnI want to reach out to all of you for help and to express my deepest concern over what is taken place in our great nation. I see us going further and further away from our values, our beliefs and what we knew as a free and prosperous nation.rnrnWednesday evening, June 30th, the house passed the “Financial Regulatory Reform Bill” (H.R. 4173 Conference Report on Financial Reform).rnThe bill still has to go to the senate for final passage. This is supposed to take place the week of July 12th. rnrnIf this bill passes in its present form, it will be the largest transfer of power to the Federal Government in the history of our country. This bill MUST not pass!rnrnA sound financial regulatory reform bill is needed but not the way this 2,346 page bill is written. The passage of this bill, in its present form, means just about our entire financial industry can be controlled by the Federal Government. rnrnThis means home loans, consumer loans, warehouse lending and traditional banks to main street will be severely damaged. These banks had nothing to do with causing the financial crisis but will be subject to 5,000 pages of new regulations. Consequently, many small banks will have to sell out to larger banks. They just do not have the staff to deal with the massive volume of new reports and rules to contend with. Each and every one of you will be impacted!rnrnThe bill calls for a consumer protection bureau to be established, a committee of people that will have more power than one could imagine over our financial structure. Those of you that have had enough with government take over and government bankrupting this country need to take a stand on this bill.rnrnrnEveryone needs to write congressman and senators, not just your own, it is important to write to Democratic congressman and senators, mainly senators, if you want this bill stopped in its tracts.rnrnThose of you that disagree with me; I will respect your views but please check out the ramifications first. Those who do agree, get out your pens, computers, your phones and start charging forward. rnrnAlso, please put this letter on your Facebook, Linked, and Twitter profile to your friends and contacts.rnrnI canu2019t stress the importance for everyone to take action on this critical bill; we only have less than a week to move on it.rnrnThank you and God speed,rn rnJohn A. Smaldonern865-983-5688rnjohnsmaldone@charter.netrnwww.USA-GodandCountry-Petition.com rnrnrnrnrnrnrnrnrnrnrnrnrnrn

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