The debate over the proposed Consumer Financial Products Safety Commission has essentially been claims from both sides arguing the hazards of unintended consequences.  Those in favor of creation of the CFPA point to recent consumer financial distress as an unnecessary consequence of less than full attention to consumer protection concerns by current regulators, which they claim would be remedied by the CFPA and its exclusive focus on those concerns.  Those in opposition raise concerns about the consequences of separating prudential regulation from consumer protection regulation and the effect of excessive regulation on innovation and availability to consumers of financial products.  By definition the actual unintended consequences are impossible to foresee, but there are probably inevitable consequences from the creation of the CFPA, some of which which the enabling legislation itself tries to address. 

A large portion of the proposed legislation specifies the structure of the CFPA and authorizes the transfer from existing regulators of personnel and responsibilities for existing law and regulation, as well as amends existing law to conform to the new regulatory structure. The more substantive provisions of the legislation specify the mandate and mission of the agency and other powers and obligations, such as rule-making and examination powers, information gathering and sharing responsibilities, adoption of disclosure and fair practices standards, creation of consumer friendly "vanilla" product specifications, and new state/federal preemption rules relative to consumer protection regulation. 

The CFPA mandate is to ensure simplicity, transparency, fairness, accountability and access in the market for consumer financial services.  In doing so, the CFPA is required to ensure that sustainable growth and innovation in the marketplace is not hindered, and that underserved consumers and communities have access to consumer financial services.  In adopting rules the agency will be required to balance the costs and benefits of those rules to consumers and to providers, and to consult with other regulatory agencies concerning the consistency of proposed rules with prudential, market or systemic objectives of those other regulatory agencies.  However, with limited exceptions the CFPA will have primary authority for all matters involving consumer protection. 

Future installments in this series will examine whether there are foreseeable consequences from creation of the CFPA in the following areas:

1. Innovation in the consumer financial products marketplace and availability of innovative products to consumers
2. The nature of providers in the financial products marketplace
3. The kinds of rule-making activities the CFPA is likely to engage in
4. Responsiveness of the CFPA to consumer and Congressional concerns and general effectiveness in protecting consumers
5. The relationship between the CFPA and the prudential regulatory bodies
6. Anything else that occurs to me along the way.