The reason for the delay is that the large banks- with the help of billions of dollars of taxpayer money- are lobbying hard against the proposed agency. (see this Center for Responsible Lending rundown/debunking of the arguments that the financial services industry is using to oppose the consumer protection agency, which - unsurprisingly - require you to conveniently disregard the events of 2007 through the present).
The bank lobbyists are pleased to have the help of federal bank regulators in opposition to the agency. Because they've all done such a good job protecting consumers and they don't want another agency coming in (that would actually be focused on consumers AND have enforcement powers) to step on their toes. The Treasury Secretary is less than impressed.
Now, 24 State Attorneys General have entered the debate. They sent a letter to Congress urging the creation of a CFPA. Here's an exerpt:
"Maximizing compliance with these rules through enforcement by both federal and state officials will promote honest competition and reward compliant businesses, while deterring potential violators. Early detection and swift action to stop fraudulent practices can protect competitors from the pressure to adopt abusive but profitable practices before they spread in a race to the bottom. The availability of a nationwide network of enforcement agencies ready to take action, if necessary, will deter violators and encourage honest competitors who do not need to break rules to win customers."
What the letter doesn't really say is that the AG's have been getting sick and tired of federal regulators trying to prevent them from enforcing their state consumer protection laws. Instead it is very positive and forward-thinking. Maybe Congress will listen?
