As summer winds down and Congress returns from recess (sadly diminished by the loss of Senator Kennedy) the swarm of lobbyists fighting or advocating the proposed Consumer Financial Products Safety Commission (CFPA) will keep temperatures high in Washington D.C..  The legislation has many flaws, and is rife with potential for unintended consequences, particularly when the idealistic teflon that has coated the proposal (and protected it from any serious policy analysis in Congress) has worn off in the day to day fray of agency operations and practical politics. 

The issues implicated by the CFPA legislation are many, and deserve consideration before the agency is authorized with the powers that are proposed.  Most of the public debate so far has concerned the removal of consumer protection responsibilities from existing regulators into the CFPA, involving questions of whether it is possible or advisable to isolate prudential regulation of financial institutions from consumer protection regulation.  Actually, this is not a question with a clear answer, and the fact that the question is raised loudest by the existing regulators and the regulated financial institutions makes it easy for a politician to ignore if so inclined.  

In the coming few weeks I will provide here a disinterested analysis of the proposed CFPA legislation and suggestions for improvement where appropriate.  I am no one's lobbyist and do not expect that my life will be impacted one way or the other if the CFPA is created or not (which is not to say that others less fortunate will not be).  My only interest here is in furthering the application of common sense to law-making and policy creation.  I am no genius, but then common sense is not rocket science.  Or economics, but don't get me started on that ...