By Silla Brush - 04/08/10 01:41 PM EDT
A top banking regulator who has been criticized for weak oversight of the industry said Thursday he supports a new consumer financial protection office.
John Dugan, head of the Office of the Comptroller of the Currency, made his comments in written testimony to a commission investigating the financial crisis.
"I support the current proposals to empower a federal agency to write consumer protection rules that apply uniformly to all providers of financial products and services," Dugan said. But the testimony does not spell out the exact type of agency or scope of power that Dugan supports. House and Senate lawmakers have spent more than a year considering proposals for new consumer protections, and there are major differences in the proposals.
The House approved a standalone Consumer Financial Protection Agency (CFPA) with power to write and enforce rules on home loans, credit cards and other products from a wide range of financial institutions. Senate Banking Committee Chairman Chris Dodd's (D-Conn.) legislation would create a consumer financial protection office at the Federal Reserve instead of a separate standalone agency. Sen. Richard Shelby (R-Ala.) has reportedly made a different offer for a council of regulators to have strong veto power over a new consumer office.
Dugan has been criticized for favoring the safety and soundness of banks over consumer protection concerns. At a Washington bank conference last month, Dugan said he had concerns about the consumer protection powers under the Dodd bill.
"In every case consumer protection has the edge and will trump safety and soundness, and I think that is backwards," he said, according to Bloomberg.