Giving Power to the Fed

Giving Power to the Fed

Kai Wright explains why a consumer protection agency inside the Federal Reserve does not make any sense.

Facebook
Twitter
Email
Flipboard
Pocket

Democracy Now reports that Congress and the Obama administration will soon focus on financial reforms. Sen. Christopher Dodd has written a proposal to reform financial rules and protect consumers from the "too big to fail" mentality of the banks. But Dodd’s reforms have drawn criticism, primarily due to housing the consumer protection agency inside the Federal Reserve.

Nation fellow Kai Wright explains why this won’t protect consumers. "It’s a bureau that has broad authority so it can police the large banks and it can police the non-bank players but…it has an oversight board that is made up of the very regulators who failed to act for the last decade [and] can overrule its decisions," Wright explained. "The minute you don’t have a strong head then you’ve got just another bureau that has no power."

Wright goes on to say that what struck him the most about covering this issue was how people who were working in the communities with predatory lending knew it was coming. The reason why an agency inside the Fed would not protect consumers is because it’s not in their interest to do so. "Their interest is in protecting the health of the banking sector," Wright said. "The people responsible for stopping [the crisis] didn’t do it, and now we’re putting those same people in charge of stopping it again."

Morgan Ashenfelter

Can we count on you?

In the coming election, the fate of our democracy and fundamental civil rights are on the ballot. The conservative architects of Project 2025 are scheming to institutionalize Donald Trump’s authoritarian vision across all levels of government if he should win.

We’ve already seen events that fill us with both dread and cautious optimism—throughout it all, The Nation has been a bulwark against misinformation and an advocate for bold, principled perspectives. Our dedicated writers have sat down with Kamala Harris and Bernie Sanders for interviews, unpacked the shallow right-wing populist appeals of J.D. Vance, and debated the pathway for a Democratic victory in November.

Stories like these and the one you just read are vital at this critical juncture in our country’s history. Now more than ever, we need clear-eyed and deeply reported independent journalism to make sense of the headlines and sort fact from fiction. Donate today and join our 160-year legacy of speaking truth to power and uplifting the voices of grassroots advocates.

Throughout 2024 and what is likely the defining election of our lifetimes, we need your support to continue publishing the insightful journalism you rely on.

Thank you,
The Editors of The Nation

Ad Policy
x