Catholic University Program on Proposed Consumer Financial Protection Agency

Catholic University Law School is presenting what sounds like a terrific program on the proposed Consumer Financial Protection Agency on October 20, 2009 from 5:00 to 6:30 p.m.  Admission will be by reservation only.  Speakers include Michael Barr, Assistant Secretary of the Treasury for Financial Institutions and a drafter of the bill, Oliver Ireland, Partner, Morrison & Foerster, Arthur Wilmarth, Professor of Law, George Washington University, and it is to be hosted by CUA professors Heidi Schooner and Ralph J. Rohner (my co-author).  The program, titled “Inventing a New (or Reviving an Old) Regulatory Structure for the Consumer Finance Marketplace” is not yet final, but here is the tentative description: 

The global financial recession of the past year or so has drawn attention to a host of questions about whether the U.S. adequately monitors and regulates the consumer credit markets and the volatile financial products sold there.  Revelations of bad or questionable practices suggest the need for more conscience, self-discipline, and fairness from market participants.  Among the questions:  Is there too much reliance on disclosure of transaction terms, or can current disclosures be strengthened and improved?  Is there greater need for regulatory authority to proscribe unfair or deceptive practices without waiting for Congress to address them?  Should federal regulatory authority be consolidated in a new federal Consumer Financial Protection Agency (as proposed in legislation introduced by the Administration), and if so what would be the nature and range of its authority?  How much of the federal agencies’ authority would be subsumed in the new agency, and how much would survive outside it?  To what extent would federal laws and regulations preempt state law in order to encourage national markets?  How should enforcement authority be concentrated, or distributed, among the federal agencies and their state counterparts?  How would a revised consumer regulatory structure relate to other proposals for tightened controls in the larger financial markets

 

Almost forty years ago, the National Commission on Consumer Finance recommended creation of a federal “Consumer Credit Czar.”  Is the proposed CFPA anything more than a revival of that un-enacted suggestion?  Are market conditions, and politics, in 2009 and 2010 any more receptive to a regulatory and enforcement overhaul than in 1972?

 

Mr. Barr, one of the drafters of the pending bill, will sketch the case for regulatory and enforcement overhaul.

 

Mr. Ireland will address the likely impact of a new regulatory structure on bank operations, safety and soundness, and profitability.

 

Mr. Wilmarth  will speak to the federalism issues inherent in sorting out federal and state roles in consumer protection.

Comments

[stainless steel coil]

The economic crisis experienced around the world was one unforgettable lesson we should keep in mind.Thus,should not happen again.We can see the importance of monitoring and control in many act especially on debt.

[plumbing training]

During a recession it is important people choose a career with potential and financial stability such as plumbing.

Credit markets do need to be regulated better, as public debt has got out of control. I agree with points you made.

[tyre fitting machine]

A lot of question has been asked after the recession but the center was on the right resolution.With the market and people affected by this crisis, answer is still questionable.

[castors]

After experiencing the effect of recession,i personally asked myself what should be now?I mean many things to fix and get back to normal but also a lesson to assure yourself on your own way.

[tyre changers]

The past recession let us know the impact of certain acts.The main key is what we learned and what should be the changes now to avoid it to happen again.

[twitter.com/AFBobBlairJr]

In answer to the question, “… can current disclosures be strengthened and improved?” The answer is an overwhelming, “Yes!” The method of calculating the annual percentage rate (APR) used in the Truth in Lending Act (TILA) in 1968, when the act was passed, should be changed from the antiquated simple-interest, nominal APR (NAPR) to the mathematically-true, compounded [^], effective annual percentage rate (EAPR). It is as simple as changing in TILA the words “multiplied by” to “compounded for.” An extreme example of the deception of using the NAPR is a payday loan on which $100 is borrowed to be repaid in 14 days with $15 in interest. The NAPR is 391.071%, calculated as (15/100)*(365/14). The EAPR is 3,723.661%, calculated as ((1+(15/100))^(365/14))-1. TILA allows a tolerance of accuracy in expressing the APR of 1/8% (0.125%). The mathematically-true, EAPR is not merely slightly over 1 of those 0.125%s, it is 26,660 of those 0.125% over, calculated as (3,723.661%-391.071%/0.125% … ASTRONOMICALLY DECEPTIVE and Unconscionable. The Truth in Saving Act uses the EAPR and names it the Annual Percentage Yield (APY), so, why not the TILA, too?

[beefy]

Is this the conference mentioned on the Catholic U law school's website entitled "Critical Insights in the Law and Law Practice: Ethical and Moral Responsibility - The Future of Consumer Finance Regulation"? If so, it will be be held at the National Press Club, not at the law school.

[Rahul]

Nice article.

Thanks
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