Take a hard look now. A new agency that consumers were promised would make bankers, credit card companies and mortgage lenders treat them fairly will never look as strong again.
Legislation to establish President Barack Obama's proposed Consumer Financial Protection Agency cleared a key hurdle this week. But it's already been watered down from what Obama proposed and will likely become even weaker when it comes up against higher hurdles on the House floor and in the Senate. It may even die along the way.
Banks flatly oppose a new consumer agency, arguing their current regulators can handle the task. The U.S. Chamber of Commerce has weighed in with a $2 million ad campaign against the plan. And some industry claims, particularly those from bankers back home, have proved persuasive with many lawmakers.
Ahead lie enormous obstacles: potentially debilitating amendments on the House floor and, ultimately, a tougher Senate landscape, where Republican support is essential to passage of any new financial regulation scheme.
"If they are insisting on a separate agency, a stand alone agency, it's going to be difficult to do a bipartisan bill," Sen. Richard Shelby of Alabama, top Republican on the Senate banking committee, said in an interview. "I wouldn't be interested in a stand alone consumer agency."
The committee's Democratic chairman, Sen. Christopher Dodd of Connecticut, has championed the agency and voiced frustration over the industry criticism.
There are "all sorts of ways" to address consumer protection, Dodd said in a brief interview, and emphasized the need to re-regulate large financial institutions so they can't again trigger catastrophic failures that ripple throughout the economy.
"Of all the things we're doing, this fixation and this preoccupation with that one issue is a little misplaced," he said of attacks on the consumer agency.
Hints of looming pitfalls for a new consumer agency were evident in the debate this week before the House Financial Services Committee. Even there, where the president's party holds a 42-29 edge, Obama didn't get all he wanted. Up until the end, White House aides buttonholed individual members, fighting unsuccessfully against yet another exemption to the powers of the proposed consumer protection agency.
The panel's chairman, Massachusetts Rep. Barney Frank, acknowledged later that of all the aspects of financial regulation that he is contending with, the consumer agency was politically the most difficult. Indeed, consumer advocates applauded him for preserving as many consumer protections as he did.
Still, Travis Plunkett of the Consumer Federation of America called the bill "battered and bruised."
Obama had called for a robust agency to police the fine print of credit cards, mortgages and other services ranging from payday loans to auto financing. The president wanted to make banks offer standardized "plain vanilla" mortgages, simple no frills home loans that customers could compare to more elaborate mortgages. He wanted to make lenders communicate with their customers more clearly. And he wanted to invest the new agency with the power to examine bank books, along with the other regulators already checking banks for their safety and soundness.
As the legislation stands now, all those measures are gone or compromised.
The idea of standardized mortgages, which administration officials had held up as a key protection for consumers, proved hard to sell even to Democrats. In the end, it wasn't a matter of bowing to the big banking lobbies but rather lawmakers listening to business leaders back home — the bankers, auto dealers and Rotarians who make up the fabric of local politics
Moderate committee Democrats succeeded in exempting thousands of banks from examination by the consumer agency, though they'd still have to abide by its rules. They argued that small community banks would be overburdened with regulators and hadn't been the cause of the financial crisis anyway. But the standard measure of a community bank is one that holds assets of $1 billion or less. There are about 7,500 such banks across the country.
The committee, however, decided to make any bank with assets under $10 billion off limits to the new consumer agency's examiners. There were also exemptions for retailers, title insurance providers, and, finally, auto dealers, although the scope of the latter is somewhat uncertain.
It was the auto dealers exception that the White House fought to no avail Thursday. While the agency would still regulate firms that provide auto financing themselves, consumer advocates say dealers are the ones who make the financing pitch no matter who actually makes the loan and should be equally covered.
The Obama administration also wanted states to have the right to write consumer laws that are tougher than federal regulations. Facing opposition from some moderate Democrats, the committee adopted a compromise that gives federal regulators the right to pre-empt state laws on a case-by-case basis.
In many instances, the changes had grudging support from most Democrats but passed by voice vote with the backing of committee Republicans. Ultimately, though, only one Republican voted for the final legislation.
"In the end," said committee Democrat Emanuel Cleaver of Missouri, "we have weakened legislation that the opposition is not going to support."