Thursday, May 21, 2009

Geithner: Consumer watchdog under consideration Is A Dumb Idea

Geithner: Consumer watchdog under consideration Is A Dumb Idea

"WASHINGTON – Treasury Secretary Timothy Geithner says the Obama administration is considering an independent agency that would set and enforce financial services regulations to protect consumers.

Geithner said the administration is studying the structure and how much authority such an agency would have. Geithner's comments Thursday were the most specific acknowledgment yet that such an entity could be part of the Obama administration's broader effort to overhaul financial sector regulations.

Geithner was testifying before a House appropriations subcommittee."

Many organizations did not perform their charters under Bush, such as the SEC, ICE, FDA, and many others. The leadership of these agencies should have been pressed to prosecute violators but they did next to nothing. This was part of the Bush Republicanism of less government and facilitating business fraud and misrepresentation. Obama can be quite effective with various government agencies such as the SEC. FDA, and ICE if he wants to press their leaders and funds them properly.

There is no need to create an independent agency to protect consumers. All one has to do is to remember 4 words "usury", "forfeiture", "jail", and "licensed".

The states and federal government over the years have legislated in favor of the consumer or in the favor of business especially the shady, corrupt, and greedy ones.
Today we have seen the effects of the Bush and Republican "free market" and the lack of supervision of financial institutions by government. Thank you Bush and Republicans for practically destroying the world economy. Bush allowed excessive rates of interest and fees and penalties to be charged by financial institutions. Bush and the Republicans fostered fraud and misrepresentation with the liar loans. Too many criminals made a ton of money while hurting the American consumer and others.

Now is the time to re-establish decent usury laws in America. What is a fair maximum lending rate for a prime home mortgage, second mortgage, new or used car loan, student loan, credit card loan, home improvement loan, and other types of loans? What should be the maximum fees and penalties on each of these consumer loans?

Usury has always been a crime. (I may be mistaken because I am not a lawyer or at least may not phrase it correctly, but you should get the gist of it). If the maximum rate of interest on a first mortgage is 8% and somebody charges more than the rate of interest is usurious and illegal.

Forfeiture is easy to understand when the financial institution forfeits the property (if any) and repayment if they violate the usury or excessive fees or penalties laws and the consumer does not make any more payments and also keeps whatever the original loan was for. Judges in Arkansas have ruled for the consumer and forced the lender to forfeit for many decades when the lender violated Arkansas usury laws.

Jail is where the government should send the hustlers that wrote the liar loans and packaged them up to sell to other institutions in the world. I always thought fraud and misrepresentation were crimes.

Licensed is where a salesperson has to study and pass tests in order to sell loans or be an institutional trader of financial instruments. All institutions have computer systems that track mortgages, other consumer loans, cash, and all...institutions must track loan sales to consumers better as to better vetting the applicant, obtaining credit reports, appraisal of property, surveys of property, fees charges, interest charges, closing costs charged and other attributes of a legal sale. If the individual violates the law, the man or woman loses his or her license and cannot work in the industry anymore. And may also be subject to fines and jail. An institution can lose its license and not be able to sell certain loan types and may be also subject to fines and jail for its executives.

A new Federal Agency to enforce regulation and protect the consumer is not really needed. Any judge should be able to rule for forfeiture when interest is usurious or the fess or penalties charged are more than the law allows.