Obama Moves To Take Control Of All Consumer Lending

July 1st, 2009 Posted By Pat Dollard.

Washington Post:

The Obama administration sent a detailed proposal to Congress yesterday for creating an agency to oversee nearly all facets of consumer lending, but the breadth of its powers is setting the stage for a fierce clash on Capitol Hill.

The bill aims to establish a Consumer Financial Protection Agency to guard Americans from the abusive lending practices that contributed to the financial crisis, such as undocumented mortgage applications, the poor disclosure of loan terms and deceptive ads.

Administration officials proposed that the new regulator have a broad mandate to cover the spectrum of consumer financial products and to fill gaps in current regulations. The agency would have the power to probe any lender, impose penalties of up to $1 million a day in cases of wrongdoing, limit the compensation even of loan officers and mortgage brokers, and check if banks have been acting discriminatorily by forcing them to disclose the race, age and gender of their customers.

An intense lobbying effort has already begun to win over the few undecided lawmakers who will be critical in deciding which details will be included in the final bill. Industry groups say they are forming a coalition to persuade members of Congress to scale back the bill.

“I think when people read this, they will be shocked about the incredibly broad delegation of power,â€