Today, Bloomberg leads off a piece by noting that "Americans are leery about creating a new federal agency to make consumer-protection rules for mortgages and credit cards and would prefer to enhance the existing powers of banking regulators." But are they? Look at the poll's language:
Congress is considering a proposal to increase oversight of consumer credit, including mortgages and credit cards. To best serve consumers, do you think this should be a new, separate agency, with complete independence and its own authority to make rules for consumer credit, or would it be better to enhance the existing system to make sure bank regulators do more to protect consumers?
24 New, separate agency
69 Enhance the existing system
7 Not sure
But that doesn't really frame the question right. A reformist correspondent suggests asking this, more accurate framing:
Should seven agencies continue to take a part of consumer protection, or should a single, smaller agency be directly responsible for consumer protection?
Seven agencies
One agency
Not sure
People often misunderstand the argument for a Consumer Financial Protection Agency and think that rule-making authority is more important than structure. But the CFPA is at its essence a structural fix -- a lot of that authority is already in the system, but regulators don't have good incentives to use it; further, the diffuse nature of consumer protection hurts accountability. By centralizing the process in one office and clarifying the rule-making and enforcement authority, you get smaller, more effective government. What's not to like?
-- Tim Fernholz
