When it opens its doors next week, the federal government’s new agency to protect consumers from financial fraud won’t be quite the aggressive watchdog promised a year ago. Because of political squabbling, the Consumer Financial Protection Bureau formally will launch without an appointed director. And the lack of leadership has real consequences.
The agency won’t have power, for instance, to crack down on mortgage brokers, some of which helped lead the nation into the housing debacle four years ago. It also won’t have authority over other largely unregulated sectors of the financial services industry, such as payday lenders and remittance companies such as Western Union, that it was created to police.
“It’s very disappointing that the centerpiece of the president’s financial reform agenda is not ready to hit the ground running,” said Travis Plunkett, legislative director for the Consumer Federation of America. more