2009 0923 - GOV - Federal Regulator Perspectives on Financial Regulatory Reform Proposals

  • 2009 0923 - GOV (House) - Banking Officials on Regulation of Financial Markets

(p13) / 35:40-38:48


  • Chairman Bair, we will start with you.
  • What was the FDIC doing in relationship to consumer protection, say, over the last 5 or 10 years?
  • In other words—because quite honestly, as I said, some folks don’t think you all were doing anything.


  • The first thing I would like to say is we don’t have the authority to write consumer rules.
  • We have never had that.
  • That has always been vested in the Federal Reserve Board.
  • Two years ago, I came to this committee and asked for the ability to do that.-- Mr. Dugan did the same thing.
  • I will be happy to give you our comment letters to the Federal Reserve Board on subprime lending, on yield spread premiums, on credit cards, and on overdraft protection.
  • We have vigorously pressed for a number of years for stronger consumer protections in key areas.
  • My examiners are only as good as the rules they have
    to enforce.  -- So that is that.
  • Number two, in enforcing the rules we do have, we have done a reasonable job.
    • Could we do better? Yes.
    • That has been one of the things that I have tried to do as Chairman of the FDIC.
  • We have increased the number of our compliance examiners, we have increased and streamlined our General Counsel section that brings these enforcement cases, and overall, we do have a pretty good record.
  • I am happy to give you the numbers concerning our enforcement cases if you would like.
  • We care about consumer protection.
  • We care about protecting bank customers. No, we don’t want to lose that. And if you want to call that turf, that is fine, but that is who we are.


  • Thank you.
  • So your response, let me be clear, is that in response to the consumer protection, you weren’t doing anything, what you are saying is in that area, for example, FDIC, you do not feel like you had any jurisdictional authority to address consumer issues?


  • We feel we did not have strong enough rules against abuses like overdraft protection and credit card and subprime lending.
  • Our subprime lending cases were brought as safety and soundness cases because those weren’t prudent loans either.
  • But we didn’t have rules in place to tackle it from a consumer protection standpoint.