New Consumer Agency May Steal SEC's Thunder
After the bang-up job the Security and Exchange Commission did to prevent Wall Street shenanigans from plunging the economy into the abyss, the White House is looking to form a new commission to step in and do the SEC's job.
The Washington Post reports that SEC Chairman Mary L. Schapiro isn't too happy about this.
"It's not a discrete thing to get moved away without damaging the fabric of the entire investment protection regime that is built up over many years here," she said.
Schapiro's remarks are likely to presage an intense debate over the future of financial regulation. A major business lobby yesterday expressed skepticism about adding a layer of regulation. Meanwhile, prominent consumer groups, which have long argued that regulatory agencies have not adequately protected consumers from risky mortgages and tricky credit cards, welcomed the idea of a new commission.
"This is by far the best idea that has surfaced in the last decade on how to protect financial consumers and the economy from many of the problems we've seen," said Travis Plunkett, director of legislative and regulatory affairs for the Consumer Federation of America.
Even though Schapiro and her peeps may be feeling blue, at least there's some good news for them. If they've got Comcast digital cable, they'll start getting the NFL Network for free in August!
As U.S. Weighs New Consumer Agency, SEC Stakes Out Regulatory Turf [Washington Post]
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Comments:
@Esquire99: Well apparently most of us (present company mostly excluded) can't seem to do it ourselves so...
There is no problem a commision can't fix.
"without damaging the fabric of the entire investment
protection regime"
And she actually said this with a straight face?
The SEC went through this some years ago when the Commodities Futures Trading Commission was established and given jurisdiction over transactions the SEC thought were or should have been within their jurisdiction. Creation of a new agency to oversee consumer financial products should not threaten the SEC. The SEC doesn't regulate many of the transactions that have sprung up in the financial markets because these products often belong to banks or other forms of financial institutions over which the SEC has only limited jurisdiction. The SEC does make mistakes and sometimes, like with Madoff, they're big mistakes, but I still find them to be one of the most competent and ethical federal agencies and wouldn't mind seeing a subdivision within the SEC to regulate these new types of transactions.
@PSUSkier: It sure would be nice if the public school system would take a little bit of time to educate kids about financial responsibility, especially since most parents don't appear to do this effectively. One of the problems with a market oriented approach to economics is there's some requirement for the market to not be made up of bumbling idiots without the slightest clue as to how financial products work.
Exactly. Especially a new commission to do the job that the old commission should have been doing. We should probably have another commission to "ease the transition".
@nataku83:
I couldn't agree more. Our school system is more concerned with test scores than with real-world skills.
@Esquire99: Our school system (both and the grade, highschool, and university level) is more concerned with building kids esteem than they are developing real-world skills.
@HIV 2 Elway:
I would agree with that too. I never could understand, even when I was a kid, why EVERYONE got a trophy/prize at the end of a game/competition. There are winners and there are losers, yet the schools don't seem to think it's important for kids to understand that.
Well gosh golly gee wilikers SEC Chairman Mary L. Schapiro... maybe you should not have dropped the ball like you did? Sucks to be you eh?
Wait, what thunder? More like "New consumer Agency May Steal SEC's Little Jolt You Get When You Walk Across Carpet In Socks".
@nataku83: the problem goes much deeper than this, imo. deception & fraud have been rampant over the past 5-10 years. even savvy consumers became trapped in awful (& sometimes illegal) products.
i agree with your point, but i think more needs to be done. these people we see getting carted off to jail - they weren't just duping "idiots" & the damage they caused has hurt EVERYONE.
that's where this comes in. i don't know if we need a new independent commission - i would prefer if they just gave some teeth to the FTC.
@HIV 2 Elway: Yeah, totally. As a university instructor, I've never handed out anything below an A+ with a free end of semester Effort Hug. Because durnit, I just want my kids to feel good!
Come on, that's not a fair depiction of most teachers.
We do face alot of pressure from helicopter parents and selfish kids, but most of us do our best not to let them get away with whatever they please.
She's made of the same fabric as bank CEOs....both complete failures yet somehow expect to keep their jobs. I would love to have been born into that world.
I believe that's what's called an Accountability Moment.
Yay!
Now, can we re-hire Chris Cox, solely so we might fire him again?
@veg-o-matic: I was referring more to the feel good degrees offered at universities that offer students ZERO marketable or useful skills.
@Esquire99: Damn right. If only the financial industry had LESS regulation, we wouldn't be in this mess we're in.
As in, we wouldn't have to worry about losing half our retirement nest-egg, since it all would be gone.
In a similar way that a crappy student not bothering to study isn't allowed to advance to the next class, the SEC should lose some of its regulatory authority for its malfeasance. Or, are you for "social promotion"?
@Esquire99: Swapping captains three minutes after the ship hits an iceberg won't stop the ship from sinking.
@HIV 2 Elway:
Well, if you mean the University of Phoenix, I might agree with you.
But it all depends on your definition of "feel good degree" with "ZERO marketable or useful skills."
I don't even know what a "feel good degree" actually means.
We don't need more layers of regulation, we just need the ones we allready have to do their jobs.
@veg-o-matic: I would say it's the degree that about 60% of the MSIS students I was unfortunate enough to share a classroom with earned. Every semester I would come in and see the exact same people in my classes who would in the course of the semester prevent anyone else from actually learning because they never understood the classes from the first year. Every lecture became an excercise in the TA/Prof trying (in vain) to teach the current class while answering questions that should be known by anyone with the prereqs. I eventually stopped going to class and just did tests, homework, and labs. The only class I made it consistantly to after my junior year was DataCom, where the teacher told some of the students to bone up or drop out (in a much nicer way).
Those students have a "feel good" degree... they might feel good that they have it, but they can't do jack related to it. /endofofftopicrant
@HIV 2 Elway: At least people with Liberal Arts degrees are taught to think.
Unlike applied degrees - computer engineering, say - where they're taught a proscribed skill-set in a dead language for jobs that will be outsourced to India anyway.
@nataku83: We have this in Illinois. You cannot graduate high school without passing a consumer education class and exam. It's been in place for decades now.
Illinois does not have markedly better-educated financial consumers than the rest of the nation.
@Eyebrows McGee (popping ~May 29): Come to Texas and say that. Also, from what I've seen, most of these "consumer education" type classes teach you how to write a check and make sure you know that adding still works the same way when you put a dollar sign in front of the numbers. Part of the problem is definitely the rapidly evolving set of scams and intricacies that is modern consumer financial products, but I think at least teaching kids to look before they jump and that there's no such thing as free money (or at least there shouldn't be...), and please apply these principles to any financial decisions you make in the future, might help a lot. Of course, I also think a lot of people have difficulty taking what they learn in a class and applying it elsewhere....
What a great idea, the first incredibly expensive commission failed miserably, so lets create a second bigger more expensive one and have them both do the same thing. There's no way that a huge expensive commission can fail!
@nataku83: Second page has a list of curriculum topics, which are pretty comprehensive:
[www.isbe.state.il.us] (PDF)
I remember back when I took the test in 1994ish, ARMs were already on it.
@Trai_Dep: [At least people with Liberal Arts degrees are taught to think.
Unlike applied degrees - computer engineering, say - where they're taught a proscribed skill-set in a dead language for jobs that will be outsourced to India anyway.]
Everyone takes about the same basic first two years (with exceptions in math and science) so I am not sure what real advantage a lib arts degree has. However with degrees like computer engineering they teach you (or at least try to teach you) how to solve basic problems. They may have called it "Java Programming" or "Advanced Object Oriented Programming" but really what they were teaching was algorithm development for problem solving. Nearly any problem can be solved by breaking the issue into its component parts. If that's not teaching someone how to think, I don't know what is.
I am about two semesters short of a liberal arts degree as well. What I learned from that was how to research. Which is important but is quite different from learning how to think.
@Jeremy Wentworth: Yeah, apparently analytic thought processes don't count for anything... I also seem to recall (mechanical engineering major here) having to take a total of 6 liberal arts classes to get my engineering degree, which was also the total number in-major classes required to get a given liberal arts degree once you had satisfied the general school wide requirements. In addition, I seem to recall that engineers generally scored better than arts majors in liberal arts classes, but I guess we never learned to think?
@Trai_Dep: I will say that one of my better students during a course I taught in the winter term was a biology major, and had never taken a course in the social sciences before.
Different kinds of thinking, maybe, but one isn't necessarily inferior to the other.
Aaaanywho, back to the original point: yes, our education system could stand to teach more financial responsibility, but I'd also argue that government oversight counts for just as much, even more.
After all, if companies didn't have so much leeway to pull all the s#!& that they do, we wouldn't be assaulted with so many opportunities to be bad consumers.. in turn, we wouldn't have to worry so much about implementing the "here's how you don't get scammed" education. Two sides of the same devalued coin.
@wgrune: Apparently the problem is the SEC can't do both without a conflict of interest. So a different group gets all the conflicting goals, though I'm not sure I like the idea of two government agencies working against each other's goals.
Right, because a brand new agency will prevent the Federal Reserve from creating a new bubble and damaging the economy in the future.
Thank you, Chairman O, for creating YET ANOTHER superfluous federal agency with it's own new addition budget, its own new additional offices, its own new additional government union employees, its own new additional bureaucracy. Why improve the effectiveness of existing expensive bureaucracy when you can create a brand new duplicate expensive bureaucracy?
That's Chairman O's plan to solve the unemployment issue! Keep creating new bureaucracies until everyone is employed! It worked for the Soviet Union. It's working fine and dandy in Cuba and North Korea.
Uh...how about the agencies we have in place doing their god damn jobs?
"New Consumer Agency May Steal SEC's Thunder"
More like "Squeaks" in stead of "Thunder"...
Rats, all of them, and in bed with the industry they were supposed to have regulated.
@grapedog: Actually, I'd prefer if the Fed did not do its job. We wouldn't have had the bubble in the first place.
Yippie. More regulations to protect consumers from themselves. I see higher prices and fewer benefits in the future.