JEREMY HOBSON: Meanwhile, today is opening day for the new Consumer Financial Protection Bureau.
Here now with the latest from his Economy 4.0 series on how the new economy can better serve more people, Marketplace’s David Brancaccio reports on the institutions that have the ability to help — or hurt — the new agency.
DAVID BRANCACCIO: The Smithsonian, the Vietnam Memorial — that’s your standard walking tour of D.C. But this is Marketplace, so let’s take a quick lesson in financial power by doing an alternative tour.
DAVID BRANCACCIO: Corner of 17th and G Streets, let’s direct our attention here, the ‘Consumer Financial Protection Bureau…’
Or CFPB. As of today, it’s the new regulator to defend consumers from abusive credit cards, deceptive mortgages and the like. The CFPB’s money comes from just a few blocks away.
DAVID BRANCACCIO: Constitution Avenue, at 20th Street. One of the fountains in front of the United States Federal Reserve.
The Fed pays the new bureau’s bills, so Congress has less oversight. Which is essential, says Travis Plunkett of the Consumer Federation of America.
TRAVIS PLUNKETT: Insulating the consumer bureau from the power of the financial services lobby so that they can make the right decisions for consumers without facing a backlash from their friends in Congress — that’s what this is all about.
But that insulation is exactly what its critics are worried about. Todd Zywicki is a law professor at George Mason University.
TODD ZYWICKI: The CFPB is going be incredibly independent and I think that’s precisely the problem.
Not enough checks and balances, he argues, to keep the new CFBP from crippling the financial services industry. Forty-four U.S. senators are vowing to hold up confirmation of a new director of the bureau until it’s put on a tighter leash. But if opponents want some kryptonite to check the CFPB’s superpowers, they’ll find some at 15th and Pennsylvania Avenue.
DAVID BRANCACCIO: What are you guys been looking at?
KEVIN: Everything! We’re on our way to the White House right now.
DAVID BRANCACCIO: Financial Stability Oversight Council is not on your list?
KEVIN: No. I can’t say that it is. I can’t say that it is.
The new Council, made up of top financial regulators like the Treasury Secretary, has the power to quash new consumer financial protection rules if they see fit.
From Washington, I’m David Brancaccio for Marketplace.