“We have the track record of them failing to take action when they should have and potentially could have averted this foreclosure crisis.”
-John Taylor, CEO of National Community Reinvestment Coalition
I cannot figure out the thought process behind putting a consumer protection agency into the hands of the Fed. This is the same regulatory body that gave a total pass to the non-bank lenders at the heart of the sub-prime, APR, and exotic loan issues.
Bloomberg sums it up perfectly with their headline: Consumer Agency Within Fed Seen as Victory for Banks.
Here’s your excerpt:
“If the Fed doesn’t start to use that authority to roll out the rules, then we’ll give it to somebody who will,” Frank said.
The Fed drafted tougher mortgage lending rules in 2007 and completed them in 2008. The rules prevented mortgages for borrowers with no documented income, required lenders to write loans borrowers could repay and made escrow accounts mandatory for high-cost mortgages. The Fed also toughened restrictions on prepayment penalties.
Separately, the Fed has forced credit-card companies to improve disclosure and has increased its scrutiny of possible discrimination in lending. The central bank referred 17 cases to the Justice Department in the three-year period ending 2009, up from nine the prior three years.
The Fed’s actions came too late, consumer advocates say.”
Consumer Agency Within Fed Seen as Victory for Banks
Craig Torres and Yalman Onaran
Bloomberg, March 3 2010