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Friday, December 11, 2009

CFPA: Should feds stop consumers, banks from dumb choices?

As the Democrats' bank-reform plan (HR 4173) was passing  the US House, 223-202, bank analyst Tom Brown weighed in at bankstocks.com against Obama's proposed Consumer Financial Protection Agency, part of the plan.

"Bad idea," writes Brown, who bashes regulators and banks alike when they claim more than he thinks they can deliver. He's worried the CFPA is going to artificially hold down loan prices, keep consumers from paying fees and rates they're perfectly willing to pay, and make banks unwilling to lend, slowing the economy and crimping banks' profits. Read him here.

Bankers say it's ironic that the government, after pushing them to lend to the poor for the past 20 years, now wants them to pull back. But if the government is going to bail out Citigroup for financing subprime loans to people who can't afford them, it has every reason to try to limit future stupid loans, no?

It's weird, though, that Obama's Treasury Department is trying to make it harder for consumers to borrow more than they can afford, at a time when Democratic Governors like Ed Rendell in Pennsylvania and Jack Markell in Delaware are trying to get more retirees to pump their pension checks into slot machines and other gambling holes.

 
Posted by Joseph DiStefano @ 2:59 PM  Permalink | Post a comment
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About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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