In huge change, Obama to strip Fed of credit card oversight

[Pirate Smile]

Source: McClatchy

WASHINGTON — Among the sweeping changes in government regulation that President Barack Obama will propose Wednesday is the creation of an independent and powerful Consumer Financial Product Safety Commission to regulate financial products such as mortgages and credit cards.

With an eye toward protecting consumers and ordinary investors, the Federal Reserve and other bank regulators would lose their oversight over mortgages, credit cards and other financial products that are sold to consumers. It's a radical shift in approach and a tacit acknowledgment of federal failure.

"Lets face it, the (Federal Reserve Board) has had the power to engage in aggressive consumer regulation at least since 1994," Harvard law professor Elizabeth Warren, who chairs the Congressional Oversight Panel, which oversees how Wall Street bailout money is being spent, told McClatchy in an interview. "They clearly had the power to stop the mortgage crisis before it started. And what did they do with that power? Nothing."

Warren's view was echoed by Rep. Barney Frank, D-Mass., the chairman of the influential House Financial Services Committee, which will write the legislation to implement and perhaps build on Obama's proposals.
"We definitely should take consumer protection away from the Fed," Frank said.



Read more: http://www.mcclatchydc.com/227/story/70192.html

[DJ13]

1. Since it wouldnt have a say in interest rates, I dont see the point

The regulation of interest rates can only be done through Congress as far as I know, since its considered interstate commerce.

I could be wrong, but .......

[Old and In the Way]

3. But it gets the primary consumer finances out of the banking sector.

I think it's a good step. Put it under political oversight where they can be more responsive/accountable.

[GeorgeGist]

53. Sorry, but I just had to laugh.

I think it's a good step. Put it under political oversight where they can be more responsive/accountable.
The Republican Syndicate: Subpoenas issued to the White House between 1995 and 2000 - 1,050 Subpoenas issued to the White House between 2000 and 2005 - 0

[kenfrequed]

56. Hmm

Well as long as the oversight board isn't packed with the credit industry it might be a useful change. I think a wait and see mindset is best, with maybe a dash of optimism.

[moodforaday]

59. Seeing as Obama's administration

is a crowd of Wall Street thugs, yes, it will be interesting to see who's going to sit on that particular commission. Creating it means nothing, absolutely nothing, Dear DUers. What matters is who will run it.

[saigon68]

68. Yes Little Timmy at the NY Fed sure "oversaw" the problem

The only overseeing he did was making sure the turd went down the toilet when he flushed it.

Not sure at the is time if he was ever good at "that" either.

[bluestateguy]

2. I wonder what people will find in this to bitch about...

nt

[Pirate Smile]

5. Ha - I take it you didn't see Post #1. You are Post #2

:D

[Name removed]

8. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[Liberal_Christian]

23. here's one; Barney Frank will write the legislation to implement it.

Not really the guy I think of when I hear regulation. You need to Youtube him talking about Fannie and Freddie on the house floor; how they didn't need oversight, transparency, or regulation, he had a very republican moment.

but really there's nothing to judge. What Obama proposes and what he actually accomplishes have been two different things.

[Enthusiast]

30. We need to youtube Franks?

Do you promote the GOP point of view everywhere you go? This is the DU. We don't promote GOP talking points around here. You should have learned that by now, otherwise we will recognize you as a stealth Republican.

[Liberal_Christian]

62. oooh, You got me Sherlock Retard.

That's my problem with Frank, genius.

Are you familiar with right and left political ideologies or are you just another sheep who is unable to think for him/herself.

Deregulation, Graham Leach Bliley, Bank Modernization, Repealing Glass Steagal, Trickle-down, "free" markets, and Raegonomic nonsense are what make the republican/conservative ideology economically inadequate to devastating.

You ask me if I promote the GOP point of view??? No but THAT'S MY POINT, FRANK DID. He was touting how Fannie and Freddie didn't need any oversight, transparency, regulation, or investigation.

I'm first and foremost a Liberal. I am loyal to Liberal PRINCIPLES and am able to recognize when so-called "democrats" are betraying the liberal base they claim to adhere to.

You are someone who obviously sacrifices their principles (or doesn't have any to begin with) for loyalty to democratic politicians. I feel sorry for you. A politician can say they're liberal, say they're going to do liberal things, than completely betray the liberal base, and as long as they have a (D) in front of their name, they're A-OK with you.

[Enthusiast]

67. Christian & Liberal?

Some are.

[Liberal_Christian]

70. I'm suppose to sugar code my answers to you because I'm a Christian.

I'm sorry if I've said some these out of frustration but you are ill-informed and you go off of pure "talking point" without doing any objective research and because of which you call me a closet republican. A liberal LEARNS from history, ideology, present-day industrialized international policy, none of which you have a firm grasp on.

[zipplewrath]

40. Quite honestly he wasn't really wrong

I'm not exactly defending lax oversight of Fannie and Freddie, but if that was the ONLY thing that happened, we wouldn't be having any problems. Fannie's biggest problem was that outfits like Countrywide were coercing Fannie into buying the bad paper or they wouldn't sell them ANY of the "good" paper. Fannie's shareholders were pushing for involvement in the risky stuff. The CEO felt he had no choice. Now, that in and of itself is an excuse for greater regulation. But as I say, Fannie was a follower, not a leader in that problem. Regulate the banking industry in general, and you'll regulate Fannie and Freddie by default.

[Liberal_Christian]

63. He WAS wrong -obviously. I agree with you in Regulating the Bank Industry though.

The thing is most economists agree that micro-managing is definitely in order now due to present events. Preventing individual institutions like Fan. and Fre. from doing now what they did back then constitutes as "Regulating the bank Industry".

[twitomy]

58. Oh swell, Barney will be doing this...

Him and Phil "Countrywide" Dodd, did such a bang up job of overseeing the mortagage industry.... :eyes:

[davidpdx]

25. Well especially since people are claiming Obama has done nothing

and comparing him to Bush. I have to really wonder why some of these people are still given the air to breath around here.

[bertman]

54. davidpdx, they're "still given air to breath (sic) around here" because this is a website

for discussing Democratic party issues, politics, etc.--not an ADORATION site for President Obama.

[davidpdx]

69. When people start comparing him to Bush

that's over the line. Then again, you defend people like that. It's kind of sick.

[aquart]

60. When we should be building altars and lighting candles?

Sorry to interfere with your religious experience. In a DEMOCRACY, people have a right to complain. In a theocracy, not so much.

[Imalittleteapot]

46. Republicans won't bitch about the greatest failure - not interest caps. nt

[Patchuli]

4. All Fired Up & Ready to GO!!

K&R Baby!!! :fistbump:

[Hekate]

6. This looks very hopeful indeed. Nice that Barney Frank endorses it, too. nt

[Jefferson23]

7. This looks good to me, thank you Obama.

[pleah]

9. K&R

[Wednesdays]

10. K&R

:kick:

[dysfunctional press]

11. regulate the rates.

on cards AND mortgages.

[The Hope Mobile]

26. yup nt

[angrycarpenter]

12. I saw a frontline special on credit cards in America

They said the Office of the comptroller of the currency was responsible for credit card regulation and had only brought one legal action against the credit card companies ever.

[The Hope Mobile]

27. OMG - infuriating! nt

[salguine]

13. Proposing it, and actually doing it, as I've seen too often before,

are two very different things. It's a great idea, but I'm not holding my breath waiting for it to happen.

Hopefully, I will eat my words. But I've seen too much hopin' and not enough doin'.

[Zodiak]

15. This is a good move, in theory

Just so long as the membership of this commission is not composed of former Goldman Sachs employees and financial lobbyists, this could work. The article seems to indicate that this will not be the case.

The fed sure has been irresponsible in recent history, and needs to have its power broken up a bit. This move could do that.

Of course, if a Republican gets hold of this commission, it could turn into a real disaster. Turning something over to politics is a double-edged sword.

[Demeter]

43. Good Point!

A good idea needs great execution by the right people, who believe in the mission.

[ChiciB1]

50. Salguine... You Took The Words Out Of My Mouth... But I Don't Use Hope Anymore....

just sitting and waiting!! ONLY TIME WILL TELL!! Trust has gone out the window for me too!

Now, you other people can tell me not to let the door hit my ass on the way out!! Seems that's the way things go here these days, but I've learned well how to "lose" many more times than how to "win" so my skin gets thicker as time goes by.

[winyanstaz]

14. Well alright then! This is a step in the right direction...

Now if Obama will only strip away the right of the feds to print money out of thin air and charge us interest, we could eventually turn this ship around!
I have not been happy with Obama lately but hope springs eternal and I am still hoping.

[Kaleko]

16. Excellent.

And just to drive the perfectionists to the edge, I'll add

three cheers for you, Mr. President!

And six salutes to the marvellously non-corrupt Elizabeth Warren! :P

[4lbs]

17. Throw a bone to Nader and put him at the head of it. (n/t)

.

[salguine]

24. That's actually not a bad idea. Him and Robert Reich together would be great.

[dorkulon]

33. Yeah, that'll happen.

:spray:

[defendandprotect]

18. Sounds good . . . back for details tomorrow --

[Rosa Luxemburg]

19. Good!

[trthnd4jstc]

20. Good

Yep

[Evoman]

21. Ha...it sounds like a great idea. Part time work for credit card and mortgage bankers.

Okay, I'm only kidding. Well, only half kidding. Is it completely cynical that I always expect the wolves to be put in charge of the hen house?

[earcandle]

22. GO OBAMA!

[truedelphi]

28. Rather than watch dogging the Big Players this new agency will look over our shoulders and

MAke sure that we don't fudge the Truth when applying for credit cards.

Meanwhile the dollar has about two more semi-good years left, and then Adios civilization.

I guess no one inside the Beltway realizes we simply need to bring back Glass Steagall.

[Enthusiast]

29. My hope is renewed! K&R

I wrote my comment before reading the other so as to preserve my first reaction. Now I will read the others.

[w4rma]

31. Thank goodness. This is good. (nt)

[and-justice-for-all]

32. The best solution for dealing with Credit Cards is to not have any..

Now that you can use your banks debit card like a visa, there really is not much point. But, if you think you need one, have just one.

[Sherman A1]

35. I have an opposite view point

I love having a Credit Card(s) and use them for all my spending and pay them off each month, taking advantage of their rebate/cash back programs to game their systems. Won't have a debit card under any circumstances as I watch a co-worker leave in tears one day after her husband had lost their debit card. The bank called them and told them that their account was being used and really wasn't too sure they would replace their savings for them. It took them a couple of months to get their money back along with a tremendous amount of headaches.

[and-justice-for-all]

36. most people do not have the luxary of paying their cards off every month..

and with Credit cards ever increasing their rates, most people are better off without them.

[Sherman A1]

38. With due respect, how

would that differ from using a debit card. With your method you are spending directly out of your account (and I assume limiting your spending to what you can afford to spend) . With mine you are simply using another vehicle to do so. I appreciate that many people overspend on their credit cards for a variety of reasons (bad money management, unexpected expenses, job loss, divorces, health care issues, etc, which many are very, very real needs and I do not judge them for their decisions, I too was in a good amount of CC debt courtesy of my charming ex wife at one time). However, you can use credit cards wisely, game their system a bit and not overspend when you use them. If your method works for you, super! But, Credit Cards in and of themselves are simply a tool, they are not good or bad in and of themselves.

[zipplewrath]

39. In this context I'm confused

If they don't have the "luxury" of paying a credit card off every month, how are they going to use a debit card? They have no choice at all with a debit card, it WILL be paid off immediately, forget the end of the month. With a credit card they get some protections against fraud and theft. They won't pay any interest of fees if they pay it off. Connect one with online bill pay and some overdraft protection and you've got about the best situation you can have. Now if you just can't control your spending, that's another story. Cash might be your best option then.

[high density]

49. If you only buy what you can afford then you can pay off in full every month

And with many cards you can earn money back or other bonuses in the process. Plus if you get hit with fraud it is a lot easier and less stressful to deal with than having your checking account drained.

[and-justice-for-all]

61. Most folks have little to no self control...

with a credit card, there is tremendous temptation to over spend and get yourself in a debt pit, if you have what you make in the bank and use your debit/credit card, you are more likely to have self restraint.

It is so easy to charge-charge-charge, and once that cycle starts it can be difficult to break it.

I am far more at ease with my debit visa, which works just like a credit card, then I am with a major corporation. I have no fee issues with mine and I have really good support from the bank in regards to any issues I have had.

Then again, what ever works best for you.

[pokercat999]

37. Your debit card IS NOT A VISA/MC

it does not have the same built in theft protection and it's not as easy to dispute charges.

Get a CC, pay it off every month you'll do better. Carry a balance and you'll do worse....a lot worse.

[Joanne98]

34. This is good news.

[peacetalksforall]

41. It seems to be good because there would be a direct line to and from

our elected officials. The link between the people and the Federal Reserve has not served us well - too vague with a history of the Fed serving corporations without a pass through to the people. Benefits both Republicans and Democrats. Our problem is that we can't predict how it would be misused if it were back in the hands of a Norquist type group. However, I hope the days of stealing elections and mass theft of our resources and tax contributions are over. ????? Not sure that it wouldn't be manipulated some way, but we have more say, ostensibly.

We need to rethink the entire Federal Reserve role. IT HASN'T WORKED. THIEVES.

[BlueJazz]

42. Oh Boy...I can just hear the Banks Now. >>>

[Kingofalldems]

44. Good one-I lost my coffee

[shadowknows69]

45. This is amazing news. Is McClatchy considered reliable?

I hope it isn't just passing oversight from one evil organization to another, but in theory this shakes things up quite a bit.

[xchrom]

47. recommend

[Vidar]

48. I've been quite critical lately, but this I really like.

[Unca Jim]

51. Let me get the two DU extremes out of the way...

Obama hates us all. This will do nothing. *

Obama loves us all. This will do everything. **


That out of the way, this bill looks like it will actually appoint regulators to regulate an industry that has been left without regulation for many years and impacts a lot of people's lives on a daily basis. Taking Consumer Protection away from the Federal Reserve can't do anything but improve it in my mind. Still, if left without teeth the new Commission can't do much more than highlight abuses.



* Yes, I understand Obama has failed to stand by people he should. He should be doing what he promised. I'm mad about that too.

** Yes, Obama has been doing a good job overall and is playing the long game. I wish people would give him more credit and time too.

[redqueen]

52. More proof that Obama loves bankers and hates workers!

Right?

[bertman]

55. Another bureaucracy to be bought off by the credit card industry. Elizabeth Warren says it best:

"Lets face it, the (Federal Reserve Board) has had the power to engage in aggressive consumer regulation at least since 1994.--snip--They clearly had the power to stop the mortgage crisis before it started. And what did they do with that power? Nothing."

And why was it that they did nothing? Well, it might have been because the people who were regulating the industry were also industry insiders who were getting paid handsomely for NOT regulating.

The answer is to FIRE the assholes who did not do their jobs. Sue them for malfeasance until they are broke to the bone. Make them social pariahs. Whatever it takes.

Then, make sure the regulators who are already charged with regulating, regulate. But that's too simple for D.C.

[SpartanDem]

57. K&R

[stlsaxman]

64. K & R Let's do this!

:fistbump:

[pam4water]

65. If they don't break up the banks and change it so a bank doesn't make most of it money up front on a

loan, non of this will make any difference.

[BrightKnight]

66. I was impressed by her interview with Charlie Rose.

She talks about the credit card policy starting at about 16 minutes.

http://www.charlierose.com/view/interview/10292

[brentspeak]

71. This isn't much of a "reform" when you consider all the power Obama is handing over to the Fed

http://online.wsj.com/article/SB124525004449623489.html#mod=article-outset-box

And all that he's refusing to do:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8482072