Home > 2011 > Personal Finance > Two Consumer Watchdogs, Two Very Different Reactions

Two Consumer Watchdogs, Two Very Different Reactions

Advertiser Disclosure Comments 0 Comments

Two top leaders of the government’s newest consumer protection agency received very different receptions on Capitol Hill this week. Raj Date, interim leader of the Consumer Financial Protection Bureau, was grilled by a panel of Republicans on the House Financial Services Committee on a range issues, including allegations that the new agency has too much power and could hurt small banks and credit unions.

“It could easily become a loose cannon,” Rep. Spencer Bachus, R-AL, the committee’s chairman, said during the hearing. “That would be the worst case scenario, and it may not, but it’s headed by a single director who answers to no one.”

[Related Article: Consumer Watchdog Walks Regulation Tightrope With Bankers]

The Republican argument that the bureau has few effective checks and balances is not a new one, and neither is the Democratic response that the bureau has plenty of limits on its authority.

“I look forward to many more hearings that denounce lack of oversight while we are overseeing this agency,” Rep. Barney Frank, D-Mass, said sarcastically.

Meanwhile, at Thursday’s hearing of the Senate Banking Committee, the tone between Republicans, Democrats and bureau leaders was far more civil. That’s because the subject of the hearing was preventing financial abuses against members of the military, a cause supported by both parties.

[Featured Product: Shop for Prepaid Debit Cards]

“While often there appears to be very little upon which our respective sides can agree, there is complete agreement, I think, on our joint commitment to supporting our men and women in uniform,” Sen. Richard Shelby, R-AL, the committee’s ranking Republican, said before testimony started.

The featured speaker at the hearing was Holly Petraeus, who grew up in a military family, is married to former Army leader and current CIA director David Petraeus and who is now assistant director of the bureau’s office of servicemember affairs. Petraeus outlined the major objectives for her office, which include helping members of the military avoid foreclosure, for-profit college scams and the age-old scourge of predatory car dealers.

“Military personnel love their wheels, and they don’t always go shopping for them in the right places,” Petraeus told the panel. “Although the CFPB will only have supervisory authority over the auto dealers who write their own loans (what are often called “buy here-pay here”), the Federal Trade Commission and the Federal Reserve are required by Dodd-Frank to coordinate with us on military auto issues, and we have already started to do that.”

[Resource: Get your free Credit Report Card]

Image: Consumer Financial Protection Bureau, via Flickr.com

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.