Key Democrats at Odds with Bernanke on Consumer Protection

Federal Reserve Board chairman Ben Bernanke wants the Fed to have a larger consumer protection role and he is now at odds with the Obama administration and key congressional Democrats who want to create a new Consumer Financial Protection Agency. At a press conference, House Financial Services Committee chairman Barney Frank, D-Mass., criticized the Fed for doing nothing to prevent predatory lending practices until the Democrats won control of the House in the 2006 elections. "The Federal Reserve will be the biggest institutional loser," Rep. Frank said, when Congress sets up the CFPA, which will have primary rulemaking and enforcement authority over mortgage and consumer financial products. "More existing powers will be transferred away for the Fed than any other agency," Rep. Frank said. Mr. Bernanke said that he believes the Fed has done a "good job" in terms of consumer protection over the past few years and he wants Congress to make consumer protection one the Fed's major policy goals.