Oh Great - Potentially Another US Government Agency

Based on Treasury Secretary Timothy Geithner’s comments that extensive changes are needed to see that the current financial crisis (arguably the worst in past 50 years) never is revisited, it appears that the Obama Administration is considering the concept of creating a new agency to focus on consumer financial products such as credit card, mortgages, mutual funds and 401K programs from such companies as but not limited to Visa, Inc. (V), MasterCard (MA), American Express (AXP), Capital One (COF) and Bank of America (BAC).

We have long agreed with Elizabeth Warren, head of the Congressional Oversight Panel (Troubled Asset Relief Program), in her argument that the government needed to enhance its efforts of protecting consumers of increasingly complex financial products. Presently, these efforts are spread across a number of federal and state agencies, including the Federal Reserve, the SEC and the Federal Trade Commission.

However, any new agency, with all the overhead that would be added, may not be the right approach at this moment considering the issues at hand. To use the SEC for example, during the 1990’s when Arthur Levitt was in charge, he stated that that he not given all the tools necessary to properly execute the commissions duties. Now most recently, SEC employees have been accused of trading in their personal accounts some of the companies that they were reviewing.

Therefore we think the government should correct certain know deficiencies and streamline various agencies and commissions before rushing to create a new and dubiously needed new agency, which would saddle the taxpayers with an even more bloated budget deficit.

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