Midmorning refill: Will new Consumer Financial Protection Bureau be as effective as possible?

Will the new Consumer Financial Protection Bureau be as effective as possible?

Questions are being raised as the fledgling agency, created as part of the Dodd-Frank financial reform bill, prepares to open its doors on July 21.

As we noted when the bill passed, Congress restricted the agency’s power in a number of ways. Today, the Center for Public Integrity is taking a closer look at those provisions and is raising questions about whether the cracks will become “crevasses.”

When it officially opens its doors on July 21, the bureau will have to grapple with lenders and Republicans in Congress who want to chip away at that reach. Already, Elizabeth Warren, the Obama administration’s appointee charged with launching the bureau, is warning that making a lot of new rules won’t work because businesses quickly find ways to get around rules.

Yet, in writing the financial reform law last summer that created the new agency, Congress has already restricted the bureau’s power over a few special interests. Others are already looking for ways to escape regulation.