BOSTON (TheStreet) — There aren't many surprises contained in the financial-reform bill dropped on Congress by Senate Banking Committee Chairman Christopher Dodd (D-Conn.).
Many of the bullet points have already been used as warning shots in recent months, challenging Wall Street firms, banks and other financial institutions. Protecting Main Street from Wall Street is a recurring theme. And its centerpiece, from a consumer viewpoint, is the creation of a Consumer Financial Protection Bureau.
"American consumers already have protections against faulty appliances, contaminated food and dangerous toys," an executive summary of Dodd's bill reads. "With the creation of
The proposed agency will be funded by the Federal Reserve and led by an independent director appointed by the president and confirmed by the Senate. It will have the authority to examine and enforce regulations for banks and credit unions with assets of at least $10 billion. Mortgage-related businesses, large non-bank financial companies, debt collectors and consumer-reporting agencies also fall under its purview.
An initial, and persistent, complaint by critics focuses on placing the new bureau within the Federal Reserve.
"A lot of attention is being paid to what address the new consumer watchdog will have, but the critical question is will this office have the authority and independence it needs to prevent a replay of the abuses we have seen in recent years that burned so many Americans?" Dodd said in a recent statement.
The question may have been intended as rhetorical. But the question of the bill's effectiveness is already a hot topic as debate begins on the bill, and the more than 300 amendments already proposed for it.
Supporters of the legislation have no shortage of talking points — since the recession started, more than 8.4 million jobs have been lost, the unemployment rate remains close to double digits and nearly 7 million have lost their homes to foreclosures.