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One Step Closer to a Consumer Financial Protection Agency

We're getting more details on the Obama administration's proposed Consumer Financial Protection Agency. According to proposed legislation the Treasury Department sent to Capitol Hill yesterday, this big, new federal umbrella would cover a lot of services that touch homeowners and buyers directly. It would become a one-stop shop to regulate mortgage lenders, replacing the patchwork of federal and state regulators that now cover the lending industry. The agency could issue guidelines for "standard" mortgages that don't have prepayment penalties or other traps that have caused trouble for many borrowers.

The new agency also could impose a duty on mortgage brokers to offer appropriate mortgages to customers. It could ban the controversial "yield-spread premiums" -- a fancy phrase for extra fees -- paid to mortgage brokers who encourage borrowers to take out loans with higher interest rates.

The new agency would regulate real estate settlement services and companies that issue credit reports and scores, possibly requiring more disclosure to consumers about the information that influences those scores.

What are the most serious consumer problems that you think should be tackled by a Consumer Financial Protection Agency, if Congress decides to create one?

By Elizabeth Razzi  |  July 1, 2009; 6:00 AM ET
Categories:  Insurance , Mortgages  
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Yea...another bloated federal bureaucracy to protect the poor ignorant gullible American people from being preyed upon by big bad business. Funny how the populace that elected Obama is characterized as being progressive and enlightened while at the same time being thought of as to stupid to read or have an attorney read a loan document before signing! Apparently the OJ Jurors were not the exception but the rule. Slowly but surely every aspect of American life will be regulated by some incompetent federal bureaucrat. A socialist's dream come true. Well not for me, my technology firm has made plans to relocate offshore and surprise, surprise 80%+ of the employees can't wait and have indicated they will make the move.

Posted by: foxwhite1 | July 1, 2009 7:34 AM | Report abuse

The fact that there are currently federal and state regulators that now cover the lending industry, indicates how ineffective or incompetent government bureaucracy can be. Will all of these agencies be closed or simply brought under another layer of bureaucrats...and why were these agencies, that have cost taxpayers millions if not billions not doing their job. Who has been fired for incompetence? Which congressman or woman heads the committees that oversee these agencies and why have they not been held accountable? I guess these questions are to sensitive for the press to ask. And as we know the politicians are different and above being held accountable. After all the health plan they will shove down our throats will not be the same health care plan they have for they and their families. Hypocrites one and all...Democrat and Republicans.

Posted by: foxwhite1 | July 1, 2009 7:53 AM | Report abuse

I think "foxwhite1" is correct; our current financial meltdown situation is largely the result of years of regulatory neglect. Congress was warned in 2004 during committee hearings and they castigated the messengers. I've been writing to my senators and congressman to let them know that I and my friends are watching their actions and we expect and deserve that they do their jobs properly.

Posted by: Ronnie68 | July 7, 2009 12:55 AM | Report abuse

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