The New Finanical Products Consumer Protection Act

A piece of legislation sponsored by the new administration that makes sense, in theory, is the new finanical product consumer protection act.   Long championed by Professor Warren, a federal act is necessary to stop consumer fraud by national financial institutions.  State officials in states other than New York and a few other states have been reluctant to pursue cases of consumer fraud in the sale and marketing of complex financial products.  But theory is not fact and the new act may go too far, proscribing more the fraud.  It may limit the sale of selected complex financial products, however marketed and sold.  The impowered agency may be asked by Congress to act like a drug approval agency rather than an anti-fraud enforcement agency.  Banks have noticed the threat and are lobbying intensely against versions of the act in draft.