Comments on: New Consumer Financial Regulation http://www.consumerismcommentary.com/new-consumer-financial-regulation/ A premier personal finance blog, established 2003. Within, Flexo discusses his own experiences with money, and he and other authors comment on a wide range of personal finance topics. Mon, 13 Feb 2012 01:22:47 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Mike http://www.consumerismcommentary.com/new-consumer-financial-regulation/comment-page-1/#comment-195280 Mike Tue, 23 Jun 2009 15:42:41 +0000 http://www.consumerismcommentary.com/?p=6876#comment-195280 "Not only banks will be regulated. Any company whose size allows its instability to threaten the stability of the economy will be within the scope of the increased regulation" Are they going to eliminate the central bank, the Federal Reserve? That and fractional reserve banking are the cause of inflation (expanding money supply = lower purchasing power of money). Allowing the Fed to inflate the money supply is what causes the booms and busts, this "business cycle". How about looking at the source to fix the problem instead of wasting time elsewhere. “Not only banks will be regulated. Any company whose size allows its instability to threaten the stability of the economy will be within the scope of the increased regulation”

Are they going to eliminate the central bank, the Federal Reserve? That and fractional reserve banking are the cause of inflation (expanding money supply = lower purchasing power of money). Allowing the Fed to inflate the money supply is what causes the booms and busts, this “business cycle”. How about looking at the source to fix the problem instead of wasting time elsewhere.

]]> By: Flexo http://www.consumerismcommentary.com/new-consumer-financial-regulation/comment-page-1/#comment-195125 Flexo Thu, 18 Jun 2009 22:38:34 +0000 http://www.consumerismcommentary.com/?p=6876#comment-195125 David: My impression that loans will be more expensive comes from the fact that companies don't like to have mandated products; if they were good for business, they would be offering "plain-vanilla" products already. Since they mostly do not offer "plain-vanilla" products currently, it is safe to assume that these would not be as profitable as existing products, and if they are not as profitable it would be good business sense to make up for that somewhere. That may be in the form of higher rates, hidden fees that find a loophole in the regulation, or perhaps the difference in profit would be made up in some other product. David: My impression that loans will be more expensive comes from the fact that companies don’t like to have mandated products; if they were good for business, they would be offering “plain-vanilla” products already. Since they mostly do not offer “plain-vanilla” products currently, it is safe to assume that these would not be as profitable as existing products, and if they are not as profitable it would be good business sense to make up for that somewhere. That may be in the form of higher rates, hidden fees that find a loophole in the regulation, or perhaps the difference in profit would be made up in some other product.

]]> By: David Savage http://www.consumerismcommentary.com/new-consumer-financial-regulation/comment-page-1/#comment-195115 David Savage Thu, 18 Jun 2009 16:28:32 +0000 http://www.consumerismcommentary.com/?p=6876#comment-195115 Good stuff to know, and as you said it will most assuredly change before enacted into law. However, I don't see why you assume the "plain vanilla" mortgages will end up costing more just because they are simple. My job is doing programming for a payday loan company, and I read a lot of the legalese their lawyers come up with to rip people off even more. I also have had to deal with the law changes that have been mandated to make things easier for the consumer, such as prominently displayed interest rates and payback amounts. This didn't make the loans any more expensive, except for the company having to pay by the hour for my services. Rates did not go up. So, just a comment there on that, I think your pessimism on the rates being higher there is a bit premature, and probably unfounded based on my previous experience. Good stuff to know, and as you said it will most assuredly change before enacted into law. However, I don’t see why you assume the “plain vanilla” mortgages will end up costing more just because they are simple. My job is doing programming for a payday loan company, and I read a lot of the legalese their lawyers come up with to rip people off even more. I also have had to deal with the law changes that have been mandated to make things easier for the consumer, such as prominently displayed interest rates and payback amounts. This didn’t make the loans any more expensive, except for the company having to pay by the hour for my services. Rates did not go up. So, just a comment there on that, I think your pessimism on the rates being higher there is a bit premature, and probably unfounded based on my previous experience.

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