Treasury Secretary Geithner supports the creation of a CFPA

“The case for the Consumer Financial Protection Agency is clear,” said Treasury Secretary Timothy Geithner in his testimony before the House Financial Services Committee last week.

Secretary Geithner appeared in front of the committee on Friday to deliver this testimony in opposition to Fed Chairman Ben Bernanke’s earlier statements.

Mr. Geithner proposes to put the Fed in charge of systemic risk and move all consumer protection issues to a new agency, a CFPA.  Alan Blinder, a professor of economics and former vice chairman of the Federal Reserve, agreed with this distribution of responsibility in his recent editorial in the New York Times.  Both experts say that the Federal Reserve is best suited to handle issues of systemic risk and overall financial stability, but believe that another agency should handle direct consumer issues.  This would prevent an excess of power within the Federal Reserve, and the limited scope of the smaller consumer-focused agency would allow it to be more responsive and effective.

Write to your elected officials today, and tell them to support a Consumer Financial Protection Agency!