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Consumer Financial Protection Bureau to Protect Against Deception

Jupiterimages/Stockbyte/Thinkstock(WASHINGTON) -- You may never have heard of the Consumer Financial Protection Bureau but the new federal watchdog agency, which officially opens its doors Thursday, is huge news in Washington.

While many Republicans and banking industry lobbyists have been focused on killing the agency before it assumes its full power, many Democrats and consumer advocates have worked equally hard to make sure it takes effect just as envisioned under last year's Dodd-Frank financial reform act.

"It's a big fight in Washington," says Christopher Arterton, a professor of political management at George Washington University. "But I think it is not something that has really penetrated consciousness of people in the country."

Nevertheless, many have expressed support for the agency's stated mission, when it's been explained to them. Three-quarters of the likely voters polled recently by the Center for Responsible Lending support the idea of a single agency charged with protecting consumers from deceptive practices by financial institutions.

Nearly three-quarters (73 percent) want federal oversight of previously unregulated financial industries -- including payday lenders, mortgage brokers and prepaid debit cards -- which the bureau is empowered to do.

Even a majority of likely Republican voters, 63 percent, support federal oversight of unregulated financial companies, the poll found.

"There's still a populist view out there among the population that the banks are responsible for the economic downturn, and it's about time we start regulating for consumer protection," says Robert Clarke, former Comptroller of the Currency under Presidents Reagan and George H.W. Bush.

Not everybody sees it that way. Many Republicans, banking industry leaders and conservative activists believe that Wall Street didn't cause the crisis; rather, Wall Street is the best solution to a crisis created by Washington. Creating an entirely new regulatory agency just compounds the problems of bureaucratic inefficiency and micromanagement that led to the last crisis, they argue.

"The fact is that any attempt to manage the market is unlikely to work, and the cost of that management ends up being borne by the consumer," says David John, lead financial markets analyst at the Heritage Foundation, a conservative think tank.

Copyright 2011 ABC News Radio

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