Legal spat over FPB continues

The Consumer Financial Protection Bureau has brought on members of Congress to battle back and forth for months. The Consumer Financial Protection Bureau does not technically exist yet, as it doesn’t start operating until July. The bureau could have regulatory authority over consumer finance and financial products. The Bureau doesn’t have a director yet, and Congress has not yet finalized the rules over what it is legislatively allowed to do. Post resource – Legal spat over financial protection bureau continues by MoneyBlogNewz.

Republicans try to rip apart the bureau

On July 21, the Consumer Financial Protection Bureau is set to begin operating. Republicans, according to CNN, try to diminish the powers of the CFPB. Rules have been introduced to congress on how the agency will carry out their function. Some of the proposed improvements would be to keep the Consumer Financial Protection Bureau from conduction operations until a director is appointed, and having a five member committee rather than a single director.

Lack of oversight being objected

The current method calls for financial institution fees paid to the Fed to be how the Consumer Financial Protection Bureau is funded; according to MarketWatch. However, the formation of the organization has been repeatedly held up in Congress for numerous reasons. The biggest concern is that too much power would be given to the director and that Warren was not appointed by congress to set up the CFPB. Warren is essentially an adviser that was handpicked by the president to help with the Consumer Financial Protection Bureau. The bureau congressional hearings are restricted and the Treasury Secretary and Chairman of the U.S. Senate Banking Committee have both voiced concerns about this. Forming a federal regulatory body will always bring up server rejections form several people.

Small banks against further regulation

Reuters believes the new regulations will make it near impossible for smaller banks and credit unions to stay open. Profit margins seem to shrink as bank sizes do. Your local small banks will have a difficult time paying the fines, while Bank of America and Wells Fargo would have no problems. Small banks depend on sources of revenue for instance account fees and interest on personal installment loans just as much as large banks do, and higher costs of compliance will make operation more difficult for them. Not everybody wants to financial institution with corporate Goliaths..

Articles cited

CNN

money.cnn.com/2011/04/06/news/economy/republicans_consumer_bureau/index.htm

Market Watch

marketwatch.com/story/gop-democrats-clash-over-consumer-protection-2011-04-06?pagenumber=1

Reuters

reuters.com/article/2011/04/06/usa-banks-regulation-idUSN0510234220110406?pageNumber=1

Bloomberg

bloomberg.com/news/2011-04-05/senate-banking-chief-says-he-opposes-change-to-consumer-bureau.html