What about the proposed legislation for a Consumer Financial Protection Agency that would monitor the banks and the lenders to see that the ordinary person or consumer is protected?
More regulations weren't what we needed. What we needed were regulators with an appetite to regulate. We had plenty of regulations on the books regarding mortgages and the associated products and practices, but no one was enforcing them.
What you need to have in the DNA of this new regulatory agency is a certain attitude. The people running it, from the very top on down, have to be a pro-consumer to the core, with a complete unwillingness to be captured by the industry they're overseeing, in the way that actually happened so completely at the Fed, at the Office of Thrift Supervision and with the Comptroller of the Currency. Both of these entities, which were supposed to be monitoring the banking system to spot these kinds of problems, had essentially been captured by the banking system. So, if we are going to institute a new Consumer Financial Protection Agency, it would have to be staffed with pro-consumer people who actually want to carefully monitor and scrutinize the all-powerful banking system they are supposed to regulate. But we have such a dismal, woeful regulatory record in this regard that it's hard to imagine that this will be allowed to actually happen.
What about the proposal that some people are making to install the new regulatory agency within the Federal Reserve? Isn't that a contradiction? The Fed is concerned with the interests of banks, not with the interests of consumers, right?