The Federal Deposit Insurance Corp. (FDIC) argued July 24 for limits on the Consumer Financial Protection Agency to protect consumers from risky financial products and warned against stripping consumer protection duties from bank regulators.
The Obama administration plan to create such an agency has been met with stiff opposition from business groups who fear over regulation of their products and services.
Bair said the consumer agency should have authority to write rules and federal banking regulators such as the FDIC should retain authority to supervise insured institutions.
Freeing the consumer agency from direct supervision of banks will allow it to focus its resources on firms that provide financial products and services that have not previously been overseen by federal regulators, FDIC Chairman Sheila Bair said in prepared remarks to be delivered to Congress.
Bair said bank regulators should continue to examine and enforce standards but allowed for the agency to retain backup examination and enforcement authority to address any situation where it determines that a banking agency is providing insufficient supervision.