President Barack Obama will propose creating an agency to protect consumers of financial products with the power to punish offending firms and stripping the Federal Reserve of some of its powers.
The Consumer Financial Protection Agency, to be announced tomorrow in the overhaul of financial regulations, will have the authority to ban “unfair terms and practices,” said a document obtained by Bloomberg News. Those powers now rest with Fed.
“We’ve got to make sure that we have somebody who is focused and responsible for protecting consumers, whether it’s on subprime loans, for their mortgages, for their credit cards,” Obama said today in an interview with Bloomberg Television.
Mish's Global Economic Trend Analysis: Obama Asks Congress for the "Power to Punish"
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