Many folks are very upset that with the passing of the financial and banking regulatory bill into law that it will create an all new consumer protection agency in the credit, mortgage, and banking industries. This upsets them because they thought we already had the FTC or Federal Trade Commission. Thus, some are now saying that one of them needs to close. But which one, the new consumer banking regulatory agency or the old stogy FTC, indeed, great question, but who says we need to close either of them.
For instance, one big complaint of mine has been who is watching the watchers? In other words who watches to make sure regulatory agencies do the right thing? Some say that is the job of the court, which decides on the cases, but such cases cost millions of dollars to pursue, and most companies settle out of court to protect their brand name and to save the long drawn out process and legal fees.
Worse, what happens when one competitor turns in another using one of these agencies? Don’t think it happens? Some think tanks believe that over 50% of the consumer cases don’t actually come directly from consumers but from inquiries from politicians whose supporters fund their campaigns, from class action lawyers who stand to gain significantly or from competitors trying to slow down their competition in the market place. That makes perfectly good sense to anyone who watches all this unfold in the real world, but most consumers don’t understand that at all.
Further, once a regulatory case or investigation is open the regulators work very hard to find fault, even if there isn’t really any harm or rules broken. Another big issue, and to make it worse, regulators often use mass media shaming to promote their work, next year’s budget, and to use this as a method of enforcement, or set an example to the industry. All that of course is well beyond their stated mission, but these days it has become their mission.
Thus, we need regulatory agencies which have the power to go after each other. For instance, if the FTC were to hype their own success by sending out press-releases to 11,000 news outlets online, right after filing a case against a company, and that press release is misleading, then it is false advertising and marketing to the consumer, voters, taxpayer’s, and the American People. Therefore, criminal charges should be made against folks in those agencies who purposely mislead the public. See that point?
So, let’s not close the FTC at all, rather expose their deeds when they break the law, or the intent of the very laws they promise to enforce. Then if the DOJ wants to close that little agency, it will have good reason to forthwith. Please consider all this.