On Bauer Business Focus — A conversation about the Dodd-Frank Act and upcoming changes to consumer financial regulation with Andrew Schneider, business reporter for KUHF 88.7 FM.
The financial crisis of 2008 has made lenders and consumers apprehensive towards loans and other financial needs. Since then, the federal government has been working on ways to reform financial regulation with a new organization, the Consumer Financial Protection Bureau (CFPB).
Larry Young, partner of the Houston law firm Hughes Watters Askanase stopped by Bauer Business Focus to discuss the upcoming changes to financial regulation and what they might mean for the consumer.
“Basically the CFPB has taken over all the regulatory functions of all the other agencies, for all of the consumer financial protection laws of the United States,” Young said. “The CFPB will have probably the greatest powers of any regulatory agency in the history of the country over consumer finance and consumer protection.”
Changes implemented by the CFPB will not only impact lenders but consumers as well, he added. Getting a mortgage loan could become more difficult for borrowers who may have previously qualified — those who are considered “risky” borrowers may not be able to compete in the financial marketplace, Young said.
The Consumer Financial Protection Bureau goes into effect on July 21, 2011, with big goals and many uncertainties. What was once a fast and loose financial system will attempt to become a tightly run industry, Young said.
“I think at every level in the 2008 crisis, the financial compensation range was such that the short term interests of the people involved were pitted against the long term interest of the institutions and borrowers, and that ultimately brought down the house.”
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