Interest Group Capture of the Proposed Consumer Financial Protection Agency
1st November 2009
Recently, Democratic Representative Maxine Waters added an amendment to the bill establishing the CFPA that would add five seats to its powerful Oversight Board for “experts in the fields of consumer protection, fair lending and civil rights, representatives of depository institutions that primarily serve underserved communities, or representatives of communities that have been significantly impacted by higher-priced mortgage loans.” All sorts of interest group representatives could easily get on the board under this amendment. For example, pretty much any bank or credit card company official could claim to have expertise in the “fields” of “consumer protection” or “fair lending.” Similarly, many banks can easily claim to “primarily serve underserved communities.” Finally, interest group representatives could pose as “representatives of communities that have been significantly impacted by higher-priced mortgage loans.” For example, lenders and real estate developers located in such areas would surely qualify; after all, they live in the community too. The majority of the board will still be made up of various federal government officials. But these officials are far from immune from interest group pressure, and of course that lobbying will be facilitated by the fact that several interest group representatives will now be sitting on the board itself.
My, what a surprise. Aren’t you surprised? I’m sure surprised.