U.S. Sen. Mike Crapo and Idaho Gov. Butch Otter spoke out Friday against financial regulations being debated in the U.S. Senate. They were joined by several business owners in Boise, who all agreed that a proposed new consumer protection bureau would hurt businesses across Idaho.
Crapo said he’d like to see some reforms to how the federal government monitors the financial sector, which contributed to the national recession, but that the plan proposed by Democrats in Congress goes too far. He said he’s disappointed the reforms won’t do anything to address Fannie Mae and Freddy Mac, the government-created companies that finance mortgages, which contributed to the financial collapse.
Crapo labeled the new consumer protection bureau, which would operate in the Federal Reserve, as another government bureaucracy.
The governor said that while large banks and other financial institutions are the target of the financial reforms, small businesses will feel the negative effects of the new consumer agency.
Both Crapo and Otter compared the financial reforms to health care reforms approved earlier this year, saying both increase the scope of federal government while ignoring root problems they are supposed to tackle.
Several business owners joined the elected officials to voice their concern with the reforms and the new consumer protection bureau. Harvey Neef owns Carpet One, which hosted the news conference. He said he doesn’t want a new agency potentially interfering with his business.
The new consumer protection bureau would have oversight on mortgages, credit cards, loans, and other financial products to prevent deceptive and abusive practices.
Steve Martinez, who co-owns the home building company, Trade Winds, said he’s disappointed the plan in Congress doesn’t include reforms to Fannie Mae and Freddie Mac, and said the reforms are several years too late.
Crapo said the he thinks some members of Congress are using the recent financial crisis as an excuse to expand the reach and strength of the federal government.
Crapo said he’d like to see a compromise on the financial regulations that wouldn’t create the stand-alone consumer protection bureau and would permanently end bailouts.
Crapo said he expects final action on the Senate financial reform plan to start next week. All 41 Senate Republicans could potentially block the legislation with a filibuster, though Crapo didn’t think that was likely.
Democratic U.S. Rep. Walt Minnick voted in favor of the House version of the financial reform package that passed in December. He wrote an editorial saying that he didn’t like all of the House version, but that more accountability for the financial system and better safeguards for Idaho businesses was needed. “This bill will also make sure that failure of one firm will not put Idaho businesses, families and local government at risk,” Minnick said. “And if a big financial firm does fail, this bill makes sure that taxpayers won’t suffer the loss – the company’s shareholders will.” Republican U.S. Rep. Mike Simpson voted against the House plan.