Monday, 24 August 2009

But who will protect stupid people from themselves?

Laura Glasser writes: "The Obama administration has proposed creating a new federal unit called the Consumer Financial Protection Agency, a regulator that would write rules to protect consumers from dangerous financial products. The CFPA would focus solely on protecting consumers from risky products and unscrupulous practices in the financial industry by scrutinizing institutions to make sure they’re obeying and punish those that don’t."

Again I ask - who will protect consumers from themselves??? I spent roughly ten years working in finance, and for part of that time I worked as a Credit Analyst. I spent hours pouring over people's credit history and approving or denying their requests. Many of these people had no understanding of the most basic aspects of consumer credit, and yet here they were asking for credit to buy things they could not afford. Of course there is plenty of blame to go around in the current situation - but when a certain administration passed regulations seemingly based on the belief that owning a home is a human right - it forced banks to help John and Jane Doe buy a home they could not afford. Now the current administration is upset that the Big Bad Banks gave loans to the Doe's which, as it turns out, they could not afford.

Ms. Glasser points out that there are four oversight agencies already covering this area. It makes you wonder if there is a competition in Washington to see who can create the most red tape.

Maybe this CFPA could have agents posted at all transaction points, where they can give consumers the yay or nay on their purchases. I hear the government already has people at yard sales.