WASHINGTON, March 12 (Reuters) - A group of current and former advisers to the Federal Reserve on consumer-related issues on Friday urged the importance of an independent consumer protection agency, as part of U.S. financial regulatory reform.
The group, in a letter to Senate Banking Committee Chairman Christopher Dodd, who has been spearheading legislation to overhaul financial regulation, said a consumer protection agency should not be made a part of the Fed — one option that has been considered amid opposition by Republicans to a stand-alone agency.
“The Federal Reserve has its hands full with responsibilities relating to safety and soundness and monetary policy,” the 18 advisers wrote in the March 12 letter, which was released to the press.
Dodd, a Democrat, on Thursday said he would unveil a new legislative proposal on Monday, after bipartisan Senate talks collapsed.
The letter to Dodd, organized by National Community Reinvestment Coalition chief John Taylor, noted that Congress in 1994 granted the Fed the power to outlaw unfair and deceptive practices in the mortgage market but ignored repeated pleas from consumer advocates to use its authority.
Dodd has said he has not settled on the location of a consumer protection agency.
Any bill passed by the Senate would have to be merged with the House version before sending it to President Barack Obama for signing into law. (Reporting by Corbett B. Daly; Editing by Leslie Adler)