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."