To begin with, be aware that the agency's powers and oversight would extend far beyond mortgages and real estate -- into all credit cards, debit cards, consumer loans, payday loans, credit reporting agencies, debt collection, stored-value cards and even investment advisory and financial advisory services, to name only part of the list.
It would have the authority to alter long-common practices that nettle consumers, such as mandatory arbitration clauses in the fine print of contracts that automatically send business-consumer disputes to arbitrators rather than to courts. The agency could ban or limit such clauses in specific products if they are shown to tilt against consumers' interests.
The agency would write the user-safety rules for virtually all consumer financial products and would have the legal firepower to levy huge fines -- tens of thousands of dollars a day per violation in some cases -- and prosecute lenders, brokers and others who break the rules.
The agency would be the dominant federal consumer protector in all home real estate settlements. It would regulate "affiliated" title, escrow and financing businesses connected with realty firms and builders. It would oversee equal credit opportunity and fair housing, and would set standards for all mortgage offerings, whether from the biggest national banks or the smallest local brokers. Generally it wouldn't seek outright bans on mortgage products that carry elevated risks -- interest-only loans, for instance -- but would require that lenders restrict such mortgages to well-informed applicants who can document that they understand the risks and can afford the payments.
Look, whether you agree or not with the idea of creating a new government agency to crack down on the mortgage and banking industry or arbitrary credit card surcharges, most people would conclude that SOME increased regulation of the lending industry is needed to prevent the rampant greed (some would say fraud) and overreaching that led to the collapse of the stock market, our retirement plans, and the banking industry.
Who opposes this legislation? The Chamber Of Commerce. Naturally, they really can't argue that the drunken greed of Wall Street and the lending industry had nothing to do with our economic collapse. Who are they targeting while opposing this newly proposed agency? Those evil "trial lawyers." What's the reason? Apparently, under the bill, the Attorneys General of each state have the power to sue and fine the financial services industry for violating any new regulations. And, in an obvious stretch, the StarChamber reasons that any state's Attorney General's office might hire "trial lawyers" to help prosecute these miscreants.
The other main reason it opposes the bill is the byproduct of another dusty and torn page of its playbook: decrying more "big government." But here's where the StarChamber really looks like hypocrites in opposing this bill: The Chamber fully supported the first bailout of Wall Street! Here's what their chief lobbyist said on the eve of the first bailout/stimulus passed in October, 2008:
Extraordinary government intervention is essential to restoring confidence and ensuring credit availability,” the Chamber’s chief lobbyist, Bruce Josten, said in a letter to lawmakers.
“Stabilizing the financial system and preventing a systemic collapse of our capital markets must be the federal government’s top priority,” he added. “Speed is of the essence.”
In addition to its key vote alert, the Chamber on Monday sent out an urgent call to action to its members across the country urging them to lean on their lawmakers to vote for the rescue plan.
“Time is of the essence!” it read. “It is more important now than ever to urge your members of Congress to take immediate action to stop the impending financial crisis.”
On Monday, Josten said in an interview that the enhanced oversight in the bill may not create major burdens for the business community because it will apply only to those that seek help from Treasury.
The message: support HUGE govermnent bailouts of the industries primarily responsible for our wrecked economy, but oppose any legislation as "big government" when it comes to protecting consumers. And, oh yeah, we've got to find a way to blame the trial lawyers for something in this bill...