Banks could win, consumers could lose, thanks to Dodd

Banks may have successfully stopped efforts for an independent consumer finance agency, and we have Senator Chris Dodd (D-Conn.) to thank for their success. Based on news reports this morning, Dodd has worked out a compromise with Sen. Bob Corker, a Tennessee Republican, for a compromise that will kill the idea of an independent consumer finance agency and instead place it inside the Federal Reserve.

The same Federal Reserve that failed to protect consumers from abuses in credit cards and mortgages as the asset bubble inflated.

That's a complete 180 degree turnaround from what he promised when he opened the committee markup of financial reform legislation in November 2009.

He sang a much different tune at that time. In his opening statement about the Consumer Financial Protection Agency (CFPA) he said, "This proposal has been the focus of well-funded, well-orchestrated attacks from the very entities that created these problems. They argue that the CFPA is a new bureaucracy by combining the disparate and ineffective functions of various agencies. They argue that it will limit credit availability. Well, the abusive lenders and their Wall Street enablers have pretty well shut down the credit markets all by themselves."