Government Intrusion Or Protection?

The new US Consumer Financial Protection Bureau issued six areas for possible oversight: debt collection, consumer reporting, consumer credit, money transmitting, check cashing, prepaid cards, and debt relief services. Car loans and personal loans are high on the agency's agenda as well.

This new agency has the banking industry shaking with fear of regulatory oversight, although given the industry's input into the deregulation of the financial sector and the recent uncovering of fiduciary shananigans with all sorts of esoteric credit, debt, and other fiscal instruments that played havoc with the economy, taking a regulatory baseball bat to the knees of some of the more questionable practices of the banking industry may be a good thing.

And yet, turning banks into risk-averse, cash-hoarding entities does no good for an economy that runs on credit. Suppliers and retailers depend on credit to expand and prosper. Should they overexpand and tumble, bankruptcy exists to correct such excesses via restructuring or liquidation. Working while looking over a shoulder is hard enough. Working while looking over both shoulders is no way to run a business.