After the excesses and misconduct within the mortgage industry leading up to the collapse of the housing market, the Obama administration has come up with a plan to create a Consumer Financial Protection Agency. Chief among the duties for the new agency would be to enforce safeguards to ensure that consumers are protected when dealing with mortgage loans and other financial products. The Treasury Department issued a press release statement entitled ‘Administration’s Regulatory Reform Agenda Moves Forward: Legislation for Strengthening Consumer Protection Delivered to Capital Hill’ with President Obama stating that the new agency would “have the power to set standards so that companies compete by offering innovative products that consumers actually want – and actually understand.” Treasury Secretary Geithner said, “Consumer protection will have an independent seat at the table in our financial regulatory system.”
The press release goes on to blame many of the worst abuses in the mortgage industry on a lack of oversight. “Had the new agency existed, its examiners could have gotten inside the operations of these unregulated mortgage companies and detected unfair, deceptive, and abusive lending practices that so damaged the markets.”
