Momentum is gathering on Capitol Hill for a new watchdog consumer agency devoted to credit and lending consumer issues. The agency falls under the Wall Street Reform and Consumer Protection Act of 2009. Here’s what the new agency would cover — and a look at its probability of passage.
The genesis for the new agency is the now two-year long economic downturn, which has been fueled by predatory lending practices. The malaise has also been extended by hidden bank and credit card fees that have hampered the efforts of the Great American Consumer to get back up on his or her financial feet.
To help fix the mess, a U.S. House vote on Dec. 11 approved the creation of the new agency, and the U.S. Senate’s Financial Services Committee has already approved the legislation.
According to the Senate’s version of the proposed bill, the new agency’s mission will be to “promote a fair and transparent marketplace for financial products and to safeguard the American public from abusive industry tactics.” The bill also extends federal supervision to a host of financial industries, such as payday lenders and mortgage originators, which should please consumer advocates who have been critical of those industries.Says President Obama, a huge supporter of the bill: “You’ll be able to compare products and see what’s best for you. The most unfair practices will be banned. Those ridiculous contracts with pages of fine print that no one can figure out — those things will be a thing of the past.”