Dodd's Bumbling Portends More Watering Down for Fed, of Groucho Marx in Reverse

Dodd's Bumbling Portends More Watering Down for Fed, of Groucho Marx in Reverse

By Matthew R. Lee

WASHINGTON, March 10 -- After watering down financial reform legislation in weeks of concessions, now Senator Chris Dodd says that while a draft bill will be "unveiled" on Monday, it and he will not have any Republican co-sponsors. Insiders predict then another round of concessions, from a bill that will, they say, place consumer protection in or at the Federal Reserve.

"Sell out city," said one consumer advocate visiting Washington this week, expressing a lack of surprise that Timothy Geithner so quickly gushed with praise for lame duck Dodd.
Some consumer advocacy insiders have been defanged into supporting the Federal Reserve by the threat that if not at the Fed, the financial protection unit could be placed in the Office of the Comptroller of the Currency. Thus they resist going public with their dissatisfaction with the Fed's track record, on the "lesser of two evils" theory.

The Fed itself has placed the Consumer Financial Protection Agency issue on the agenda of the next meeting of its own Consumer Advisory Committee, half made up of bankers. Of the other half, some are in the Fed's sway on a reverse Groucho Marx theory.

Groucho said he didn't want to join any club that would accept the likes of him. The insiders won't oppose any club that has issued them an invitation. It would be funny if it weren't so sad, ill-serving consumers. Those who were previously invited but who've now left may have more freedom to speak. We will have more on this.

As Congress Dithers for Payday Lenders, CRA Activists Raise Stakes in St. Louis and Philadelphia

As Congress Dithers for Payday Lenders, CRA Activists Raise Stakes in St. Louis and Philadelphia

By Matthew R. Lee

WASHINGTON, March 10 -- As legislators from both political parties dally on Capitol Hill, considering handing consumer protection to the Federal Reserve like Democratic Senator Chris Dodd or leaving enforcement over payday lenders off to the side like Republican Bob Corker, the real work of protecting consumers is done by grassroots groups.

Inner City Press learned on Wednesday of an all too rare Community Reinvestment Act challenge filed recent in Missouri, which has delayed the recalcitrant bank's application for regulatory approval for several months. The Metropolitan St. Louis Equal Housing Opportunity Council, which filed the protest, says that CRA has been largely moribund in St. Louis for the last 20 to 30 years.

Now, in the face of the economic meltdown, it is back. On the sidelines of the NCRC conference, three EHOC staffers spoke of pouring over list of regulatory approvals, commenting on CRA performance evaluation, reaching out for allies to Kansas and Jefferson City. Meanwhile a former NCRC staffer is starting work at the Federal Reserve Bank of Philadelphia. Progress can be slow -- but it is still faster than Congress.

Lame Duck Dodd Follows Republicans to the Federal Reserve: CFPAbsurd

As of March 4, the move in the Senate is to put a consumer protection divisions inside the Federal Reserve, the same agency which stood by as Citigroup, HSBC, Bank of America and JPMorgan Chase got more and more involved in subprime lending.

Why would anyone believe the Fed can or will crack down now? Beyond being lax, the Fed may have the fastest revolving door in Washington. Stephen Friedman, former NY Fed chief, reportedly benefits from the Fed's bail out of AIG. Another former NY Fed head, Corrigan, appears in Europe to defend his new employer Goldman Sachs' shenanigans to help Greece conceal its level of debt from the EU. Why would one consider entrusting consumer protection to this gang?