Mar 10, 2010

"I think everyone has seen versions of this game. The street-corner con artist puts a pea under one of three cups and then whirls them around with speed and deception, while the 'marks' bet on the ultimate location of the pea.

Evidently there is enough profit in this enterprise to guarantee new entrants over time. This is the game that is being played out in real time by Christopher Dodd, the lame duck chair of the Senate Banking Committee, and his Republican counterparts as they try to forge a compromise that will lead to a new regulatory architecture for the financial system. The particular pea in question at the moment is consumer protection.

In the early proposals from the Senate Banking Committee the creation of an independent Consumer Financial Protection Agency (CFPA) was a centerpiece of the proposed Restoring American Financial Stability Act. The draft bill also proposed to strip the Federal Reserve of its regulatory authority over financial institutions and its role in consumer protection so it could focus on its primary role--monetary policy."

Click to go to the Forbes website and view the entire op-ed.