Mary Schapiro, chairman of the Securities and Exchange Commission, bridled against the proposal that the government create a consumer financial protection agency. Evidently, the SEC wants to maintain its regulatory control over mutual funds.
Its not a discrete thing to get moved away without damaging the fabric of the entire investment protection regime that is built up over many years here, Schapiro said. I will question pretty profoundly any model that would try to move investor protection functions out of the Securities and Exchange Commission, which, she maintained, is committed to investor protection.
Likewise, the U.S. Chamber of Commerce and the Mutual Fund Directors Forum expressed concerns about creating another regulatory agency. What you want is regulators who really know the business theyre regulating. Defusing expertise among regulators is not a good idea, said David Hirschmann, president of the Center for Capital Markets Competitiveness at the U.S. Chamber.
Susan Suderko, executive director of the Mutual Fund Directors Forum, weighed in by saying, I think that it is going to be hugely expensive and highly inefficient to try and recreate the Securities and Exchange Commission.
But the Consumer Federation of America welcomed the idea of a new consumer protection agency focused on financial products, including mutual funds, credit cards and mortgages.
This is by far the best idea that has surfaced in the last decade on how to protect financial consumers and the economy from many of the problems weve seen, said Travis Plunkett, director of legislative and regulatory affairs for the Consumer Federation. Plunkett said that rather than focus on consumers, regulators are more sensitive to the financial profitability of the companies they oversee.