Obama Proposes Overhaul Of Financial Regulations
RENEE MONTAGNE, host:
NPR's business news starts with new rules of finance.
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Today, President Obama unveils his plan to overhaul the regulation of financial companies. The goal is to bring more stability and make meltdowns less likely. According to a draft of the proposal obtained by NPR, one of the president's ideas is to create a new agency that would focus on consumer financial protection. NPR's John Ydstie has more.
JOHN YDSTIE: A failure to protect consumers from subprime lending and other exotic mortgage products helped cause the current crisis - and misery for lots of homeowners. Yesterday, an administration official said the new consumer financial protection agency would address that failure. The agency would have the power to oversee the relationship between financial firms and consumers. It would also regulate products such as credit cards and mortgages. The official pointed out that many financial products are difficult to understand, even for sophisticated consumers. The new agency's focus will be on transparency and simplicity. Consumers groups strongly support the proposal, but the idea also faces stiff opposition. Yesterday, during a conference call with reporters, David Hershman of the U.S. Chamber of Commerce voiced serious skepticism.
Mr. DAVID HERSHMAN (U.S. Chamber of Commerce): Creating a new regulatory authority is not a silver bullet for enhanced consumer protection. In fact, it may be a lead balloon.
YDSTIE: Hershman said the new agency would duplicate the work of other regulators, and would encourage consumers to take less responsibility. Speaking to reporters at the White House yesterday, President Obama said he expects opposition to some of his proposals.
President BARACK OBAMA: You'll hear a lot of chatter about we don't need more regulation, government needs to get off our backs. There's a short memory, unfortunately, and I think that's what some of the special interests and lobbyists are going to be counting on, that somehow we've forgotten the disaster that arose out of their reckless behavior.
YDSTIE: As for a new pro-consumer regulator, the president told Bloomberg Television yesterday, we've got to make sure we have somebody who is focused and responsible for protecting consumers.
John Ydstie, NPR News, Washington.