A recent Chicago Tribune editorial discussing the new Consumer Financial Protection Bureau illustrates well (perhaps inadvertently) the haphazard, cobbled together nature of the large new bureaucracy that will wield considerable power over the economy. Under the guise of “consumer protection” this new agency will be given considerable influence over how and when companies will be allowed to provide loans and services. While this role may seem innocuous to some, the hidden implications are a startling breach of freedom and choice for millions of Americans.
Let’s not forget the cost! Bureaucracies are by their nature cash burning machines and this new agency is no exception. The real results of the financial reform package and the new consumer protection agency will become quickly apparent to consumers: none of these “improvements” comes without added cost. Increased regulation and restrictions on these fees will inevitably increase the cost of providing credit, reduce consumer benefits, and increase fees. In the end, responsible consumers could be hurt.
As the Tribune editorial acknowledges, consumers can expect benefits that they have become accustomed to, like free checking and rewards programs, to disappear. Combined with multiple “exemptions” being given to well connected (see well funded) groups within the financial industry, the average consumer is wise to be skeptical of their new “advocate.”
