US Consumer Finance Agency Plans Draw Concern

Two leading financiers on Monday expressed concern about the agenda being pursued by the new U.S. consumer finance watchdog, fearing it may restrict access to some products rather than educate buyers and investors about potential risks and rewards.

The remit and structure of the Consumer Financial Protection Bureau remains under intense scrutiny ahead of its planned July launch, with an initial focus on improving disclosure in mortgage products. "I think the grave concern is will they mandate the products that can be offered," said Ken Griffin, founder and chief executive of Citadel, the Chicago-based fund manager and financial services firm. Griffin and fellow panelists at the Milken Institute Global Conference said mortgage firms will work around any prescriptive measures, such as requiring a 20% equity deposit on new mortgages.

"I think they want to go after choice," said Tom Wilson, chairman and CEO of insurer Allstate Corp. (ALL). "It's a paternalistic element I don't agree with."

The agency is also working on improving the transparency of credit card products and some broader consumer education elements are also being developed, according to Elizabeth Warren, the academic tapped to oversee its creation. Warren, seen as a potential director of the agency, has been canvassing its agenda and planning with bankers in recent weeks. "The much bigger part of what we do will be supervision and enforcement," she told an audience of bankers in Kentucky earlier this month.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com

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