Consumer protection still homeless

WASHINGTON, March 3 (UPI) -- Sen. Christopher Dodd, D-Conn., said regulatory authority, not location, was the critical matter concerning a financial protection agency for U.S. consumers.

"What is most significant is what powers will it have, and will we be able to do something about what happened to consumers in recent years," said Dodd, who is trying to sell the idea of creating a consumer protection division within the Federal Reserve.

After ruling out the Treasury Department as a possible home for consumer protection, the Fed became the last option available after Republicans said they would not support a new stand-alone federal agency, which banks also opposed, The Washington Post reported Wednesday.

But the Fed has been harshly criticized for missing cues of the collapsing housing market that turned into a prolonged recession and several lawmakers panned the idea of putting consumer protection in the Fed's jurisdiction.

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, called the idea "almost a bad joke."

Sen. Charles Schumer, D-N.Y., said, "In my 20 years of trying to get the Federal Reserve to properly protect consumers, it has been an uphill, and often unsuccessful battle."