Sun editorial:

Helping consumers

Financial companies are balking at President Obama’s plan to overhaul regulation

Thursday, July 2, 2009 | 2:05 a.m.

President Barack Obama on Tuesday sent Congress a bill to protect Americans from unscrupulous financial deals.

The Consumer Financial Protection Agency would have broad powers to write and enforce rules and oversee companies that provide financial products, including credit cards and mortgages. Under the White House’s plan, the new agency would be similar to those responsible for food, drug and product safety.

The 152-page bill would consolidate a number of oversight duties into the new agency. The CFPA would have the power to monitor the terms of payday loans and bank accounts. It would also assess the risk of financial products. The bill would also require that consumer financial contracts be stated in clear, concise language. The new agency could even create consumer labels for financial products.

Treasury Secretary Timothy Geithner said the agency would have “only one mission — to protect consumers,” and that is welcome news considering that the nation’s regulators failed to protect the average American leading up to the economic meltdown.

Obama has also made it clear that enforcement would “be the rule, not the exception” for the agency.

Since the idea for the agency surfaced this year, the financial industry has expressed strong opposition to the plan. It says government oversight would hinder development of new financial products. Many Republicans and business lobbyists are lining up with the financial industry to fight the bill.

That is a shame. It was the lack of regulation, coupled with the financial industry’s unbridled greed, that led to the nation’s economic meltdown.

The terrible economy has devastated average people who had nothing to do with the failures of wealthy executives in the financial industry who gambled with the economy just to make a quick buck.

Obama’s bill will provide a starting point for the discussion on the overhaul of financial regulation. The question isn’t whether the country needs this, but how it should be done. Congress should make it a priority.