This week, Deputy Treasury Secretary Neal Wolin delivered a speech at the U.S. Chamber of Commerce in which he took the Chamber to task for lying about the effects of financial regulatory reform, and particularly the push to create an independent consumer protection entity within the regulatory structure. As Wolin put it, the Chamber “has launched a lavish, aggressive and misleading campaign to defeat the proposed independent agency”:
Despite the urgent and undeniable need for reform, the Chamber of Commerce has launched a $3 million advertising campaign against it. That campaign is not designed to improve the House and Senate bills. It is designed to defeat them.…We believe that the fight against financial reform is shortsighted and misguided.
CNBC host Larry Kudlow, a disciple of Ronald Reagan who has sworn undying fealty to supply-side economics, also took the Chamber to task this week for its stance on regulatory reform, saying that “the Chamber of Commerce is a very negative force on this. Absolutely negative and absolutely wrong in my humble opinion.”
Having been hammered from left and right, you’d think the Chamber would get the message. However, Thomas Quaadman of the Chamber’s Center for Capital Markets Competitiveness was on C-Span today, fearmongering that the consumer protection agency would regulate department stores and dentists:
If you extend credit, you’re going to fall within the parameters of this agency…Macy’s and Sears, and you know what, in certain circumstances if you have a high dental bill that you need to pay off over the course of time, that dentist could be regulated by that agency. So we don’t think that the dentist, or the butcher, or the florist that extend credit to their customers should be regulated by Washington bureaucrats.
House Republicans used the same tactic during its regulatory reform debate — claiming that the new agency would regulate churches and doctors — and the charge is no more true now than it was then. Both the bill that the House passed last year and the bill that the Senate Banking Committee passed this week contain clear exclusions “for merchants, retailers, and other sellers of non-financial services.”
In fact, the Senate bill explicitly states, on page 1080, that the consumer protection bureau “may not exercise any rulemaking, supervisory, enforcement, or other authority under this title with respect to a merchant, retailer, or seller of nonfinancial goods who extends credit directly to a consumer, in a case in which the good or service being provided is not itself a consumer financial product or service.” So unless the dentist that Quaadman is referencing is hawking credit default swaps between root canals, he has nothing to fear from financial reform. The Chamber is merely continuing to dishonestly whip up opposition to a bill meant to protect consumers from Wall Street excess.