As Jane Bryant Quinn Points out in an article advocating for a Financial Products Safety Commission, the recently bandied about idea of granting the Fed uber regulatory powers is absurd. They already have them and they are uber loathe to use them. Why? Perhaps, because they're owned by the very banks they would be regulating.
Quinn points out -
The federal government could have stopped at least some of these abusive practices. Under the 1994 Home Ownership and Equity Protection Act, the Federal Reserve had the power to end unconscionable mortgage lending, including loans made without regard to whether borrowers could repay. Under the Truth in Lending Act, the Fed also has the authority to address credit- card abuse. It didn’t bother until the roof came crashing down.
FINANCIAL PRODUCTS SAFETY COMMISSION
Apparently, this White House and Congress are listening to a2 year old idea from Elizabeth Warren, Chairwoman of the Congressional Oversight Panel for TARP, which proposes a Financial Products Safety Commission, modeled along the lines of a Consumer Products Safety Commission.
As Warren sees it, a safety commission could have jurisdiction over all consumer-credit products: mortgages, credit cards, payday loans, installment loans, car loans, consumer-credit reports and also consumer privacy.
The commissioners would have two principal jobs. One is true disclosure. They would require simple, standardized price and interest-rate disclosures so you could compare the cost of one credit product with another. If a pricing mechanism was too complex to explain simply, and trapped consumers into paying more than they expected, it would be banned.
...another reason for setting up an independent Financial Product Safety Commission. It would be on the job all the time, requiring cost disclosure and monitoring risks.