Fairfield County Business Journal Q&A from the Corner Office
Q&A from the Corner Office
President Obama’s proposed consumer financial regulatory body is inviting praise and criticism alike. Peter Grabel, a private mortgage banker at Luxury Mortgage Corp. in Stamford, who also serves clients in Westchester County and New York City, revealed potential pros and cons.
Q: What impact would the Consumer Financial Protection Agency have on local mortgage lenders?
Grabel: “Under the terms of Obama’s plan, the Consumer Financial Protection Agency (CFPA) would have sweeping authority over providers of financial products, such as savings accounts, credit cards and mortgages. Though the extent of the new agency’s powers are still unclear, the CFPA would be charged with ensuring that consumers have clear information about the financial products or services they purchase and protect them from deception. The agency would attempt to accomplish this by requiring lenders to make safer, ‘plain vanilla’ products clearly available to consumers, while stepping up scrutiny on ‘alternative’ products. The new agency would have broad authority to write rules and enforce compliance through fines or penalties.
“While I believe the intentions are admirable, the unintended consequences of regulation almost always seem to outweigh the benefits.
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