WASHINGTON - John Stumpf offered his candid assessment Wednesday night on a range of contentious financial services topics, including monetary policy, the housing crisis, proposed capital rules and consumer protection.

Speaking during a panel discussion hosted by the Financial Services Roundtable, the Wells Fargo & Co. chief executive criticized the Federal Reserve Board's decision to launch a third round of quantitative easing. Rather than enticing borrowing with low rates, policymakers should be more worried about the negative impact such low rates are having on savers and people living on a fixed income.

"I'm not so sure how effective QE3 is going to be starting the fourth year after a recovery and the 5th year after a downturn," Stumpf said. "It's supposed to be about housing.But we make a lot of mortgage loans, and I don't know anybody who says, 'I want to buy that house, I've got a good job, but it's that darn 3.5% mortgage rate holding me back.'

"And yet we have 10,000 Americans retiring every day, and they are having to take risk on the asset side, going out on the yield curve.So I don't get it."

Stumpf is no happier with the policy coming out of the Federal Housing Finance Agency, which has pressed Fannie Mae and Freddie Mac to force originators to take back mortgages.

"We have to solve the put-back risk," he said. "That would be a huge stimulus for lending, which would be a huge stimulus for the economy. But you have the Fed with its QE1 and 2 and twists and what have you, doing all these things to encourage borrowing and then you have another agency, the FHFA, saying put these things back. You have a very different view from two sides of inside the Beltway and it's not good for America. That's what I worry with a lot of this, having less credit available for fewer people at higher prices."

Stumpf conceded that lenders are a little gun-shy in the wake of the recession, but he said public policy is exacerbating the problem.

"There is a natural reaction to pull back [credit], but there shouldn't be a policy action to encourage it and that's exactly what's happening in the mortgage business," he said. "Today many mortgage originators have what they call a credit overlay. So they do their standard underwriting and then they do a credit overlay that will eliminate certain lower credit scores. Why would they do that since they are guaranteed by Fannie and Freddie anyhow? They are worried about put-backs, they are worried about repurchase risks. Five years down the road something happens, a 't' is wrong, or an 'i' is wrong and the deal goes bad.

"You have 18 agencies looking over your shoulder, telling you what you did. And you lose most of what's put back. So you decide I am not going to do those. I am not going to help those Americans who might have a lower credit score."

New rules from the Consumer Financial Protection Bureau are likely to further tighten credit, he said.

"I actually agree with what they are trying to accomplish. Who wouldn't want superb products and services and a level playing field and things that help customers? I am wildly in favor of that," Stumpf said. "The challenge is this: this is not a new agency that is going to change the operating hours of national parks. This is a group that is going to have an influence over probably the biggest part of our economy - consumers."

While saying CFPB officials are "good people who were given an impossible job," Stumpf used the agency's rule on remittances to make his point about the impact on credit.

"What's going to happen is there are going to be fewer people transferring money at higher cost helping fewer customers. How can that help America? Wait until we get to the big stuff like mortgages. And there is a whole host of this stuff," he said.

"So I am in favor of the motivation and what they are trying to accomplish, but how it all comes out is still a work in progress and I am concerned about what I have seen so far."

Another drag on credit will be the higher capital requirements of Basel III, he said.

"I worry about what does it do to consumers, what does it do to businesses, large and small, that rely on credit."

And then he added a line that drew applause from the 300-plus audience, many of whom were bankers: "More, more, more can't be the answer. It's part of the answer, but if we can't earn our cost of capital we can't be in business."

Asked whether the Dodd-Frank Act cured Too Big to Fail, Stumpf decided to answer a different question.

"We have $150 billion worth of capital plus we have a gain in our bond portfolio plus we have a bond initiative of another $175 billion," he said. "You put that all on the table before the taxpayer comes in, and it's almost incomprehensible how one could ever get to a taxpayer bailout. These are enormous sources of capital and resolution dollars."

Stumpf also urged Congress and the White House to cut a deal on the deficit and avoid the so-called fiscal cliff.

"This litany of uncertainty and the lack of clarity is keeping our hands in our pockets," Stumpf said. "Our vaults are overflowing with deposits. I have never seen it like this."

Balance sheets are in great shape, yet companies are not investing, he said.

And while there are forces beyond US policymakers' control like Europe's economic problems and political unrest in the Mideast, there are plenty of domestic problems that need fixing.

"It's the issue of the regulatory cliff - all of this stuff getting in the way of doing business. And the litigation cliff," Stumpf said. "Those things that we actually have control over but not yet the will to deal with will probably determine" whether the economy recovers or continues to limp along.

The industry, Stumpf said, has an important role to play and must win back the public's trust.

"The country is hurting. The recovery has been stuck in first gear," he said. "We have issues we all need to come together on. And we have a special role to play in that. It's more than marketing. It's being straight. It's helping customers. It's our industry collectively modifying 5.5 million home loans. We have still lots of work to do and we all take that seriously."