Elizabeth Warren’s proposal, in the latest issue of Democracy, to create a single, new regulatory regime for the credit industry is of great interest to lawmakers, as Forbes‘s Brian Wingfield explains.
Under Warren’s plan, the commission would prevent credit card marketing to college students, provide statements to show when the balance will be paid off, and require that the card’s terms remain the same until it expires. It’s a Nader-esqe idea with little chance of happening, despite Washington’s attention.
[Massachusetts Democratic Congressman Barney] Frank has not indicated that he will support a single regulator. But he and Rep. John Dingell, D-Mich., suggested in a letter to federal regulators last month that they will push for the rules already in place to get tightened. The congressmen want the Federal Reserve, the Federal Home Loan Bank Board and the National Credit Union Association to define unfair lending practices and mandate ways to prevent them, as the law states.
“There clearly is the need for some new regulatory authority on the table,” says Frank, adding that how this should be done remains to be resolved. “Whether it’s a new regulator, or whether you lodge it with an existing one, is one of the questions we’re going to be looking at” in the coming months.
Congress will also likely push for greater cooperation among state and federal regulators. Wednesday’s hearing is prompted in part by a U.S. Supreme Court decision from earlier this year, Watters v. Wachovia. The justices ruled that states don’t have regulatory authority over the subsidiaries of national banks like Wachovia, prompting concern by Frank. Regulators from Iowa and Massachusetts are expected to testify about this issue before the committee this week.
Read the full article here.Forbes