Today, Sen. Kit Bond (R-MO) appeared on CNBC to provide his thoughts on, among other things, the consumer protection agency that the Obama administration wants to create as part of its financial regulation package. Like the banking lobby, the Chamber of Commerce, and some conservatives in Congress, Bond is opposed to creating the agency. However, his reasoning seems to be that, in his personal experience, banks actually provide “too much information” to consumers:
I think, really, the idea to have a consumer protection regulator, in addition to a banking regulator, is a bad idea…We bought a bunch of houses in recent years. My wife likes to move. And each year, each time we go through this, you get these stacks of paper. You get too much information. It is not consumer information, and that is part of the problem.
So, Sen. Bond, how many houses do you own? But more importantly, isn’t the fact that mortgage contracts are getting larger and more complex an argument for the creation of a consumer protection agency? It would seem that the overabundance of material would make it more likely that a consumer gets unwittingly ripped off.
As David Lazarus wrote in the Los Angeles Times, the real problem here is that banks “have consistently proved themselves unworthy of customers’ trust“:
From runaway credit card interest rates to mortgages that turn into one-way trips to foreclosure, lenders have repeatedly demonstrated their inability to deal with customers fairly and responsibly. Instead, they place their own interests ahead of all other considerations, and in so doing expose frequently unsophisticated consumers to enormous risk and financial ruin.
There are a lot of ways to get lost in the forest of subprime mortgages, reverse mortgages, and other complex financial instruments, even without taking into account the banks’ active predatory actions. Bond wants to have bank regulators also regulate products on the ground level, but those regulators have already demonstrated that they operate at 30,000 feet, watching over the soundness of an institution overall (and not even doing a good job with that), but not the financial safety of consumers. I think it’s asking too much to have them policing both an institution’s health and the way in which that institution interacts with consumers.
But at least Bond didn’t join the rest of the CNBC crew in claiming that only “suckers” and “idiots” are victims of predatory lending.