Exclusive Online Only ContentDimon: Consumer Protection Agency Not Needed. Consumer Protection Is.
October 27, 2009
Consumers need more protection of their economic interests, according to Jamie Dimon, the chairman and chief executive officer of JPMorgan Chase, the banking firm that took over investment bank and brokerage Bear Stearns in last Fall's mortgage-related credit crisis.
But a new consumer protection agency is not the answer, he said, in a luncheon discussion at the annual meeting of the Securities Industry and Financial Markets Association in New York.
Another layer of government can be avoided, he said, if the Obama Administration, which is pushing for such an agency to be created, and Congress instead created and assigned new tools for protecting consumers. The homes for the tools could be the Office of the Comptroller of the Currency, the Federal Reserve and other existing agencies or departments of the federal government.
"We already have multiple regulators,'' Dimon said.
Most needing addressing, he said are:
- Mortgages, with some sort of permanent logical replacement or enhancement of the functions in the past performed by the Federal National Mortgage Association, known as Fannie Mae, and the Federal Home Mortgage Corporation, known as Freddie Mac.
- A resolution mechanism, that would safely unwind large financial institutions that are failing. Even firms as large as his own, a firm that now counts $2.1 trillion in assets, should so large a firm ever be on the brink.
- A systemic risk regulator, to look around corners at potential risks to the economy, which the Obama Administration also has made a centerpiece of its financial reform package.
But, he said, the point is not to just get the reforms "done."
"These things have to be well done," he said. "Let's do them really really well. Thoughtfully and really well."
He said the economy has settled down, but not recovered from last Fall's crisis.
"We've come back to a stability," he said. "Not growth, but a stability. And that's a good thing."
He estimated that there is $1 trillion of "excess cash" that U.S. corporations are holding onto, waiting for signs of consistent growth returning.
