GO
Loading...

Enter multiple symbols separated by commas

Obama Reforms May Put Banker In the Middle: Expert

Creating a separate Consumer Financial Protection Agency could cause banks to make unsound loans, said Camden Fine, president and CEO of the Independent Community of Bankers.

Under the current structure, the consumer group and the safety and soundness group are housed within one agency. When tensions arise — for example, the consumer group wants someone to receive a loan, but the safety and soundness group thinks it’s too risky — there is one person at the top who makes the final call. See video for the full interview

But if President Barack Obama's financial reform plan passes, the consumer examination force, with its social goal, will continue to have a completely different mission than the safety and soundness board, who looks out for the investor.

And this time, instead of having one uniform head to appeal to, the two groups will be caught in a power struggle pushing their separate missions. This could result in banks making risky loans.

"You're going to have two co-equal agencies clashing all the time," Fine said. "They're going to catch the banker in the middle."

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

U.S. Video

  • Pitbull loves to see growth & innovation

    International music star Armando Christian Perez also known as "Pitbull", discusses the growth, innovation and opportunities at the eMerge Americas Conference in Miami, with CNBC's Melissa Lee.

  • Gundlach: Rates have bottomed

    "The Fed has a big conundrum," says Jeffrey Gunlach, Doubleline CEO, who discusses the bond market and when the Fed may raise interest rates, with CNBC's Scott Wapner.

  • Easterbrook is missing the point: Pro

    Kathryn Slater-Carter, FMR McDonald's Franchisee, discusses McDonald's new plan. They need a culture change, says Slater-Carter. David Palmer, RBC Capital Markets managing director, weighs in.