Merkley calls consumer protection plan inadequate

WASHINGTON — Oregon Sen. Jeff Merkley added his name today to a bipartisan chorus criticizing a Senate proposal giving the Federal Reserve power to police banks and other financial institutions from abusing consumers.

In a statement and in comments on the latest proposal from Sen. Chris Dodd, D-Conn., Merkley said the Federal Reserve has “done an abysmal job” with the limited powers it currently has.

Expanding that authority to make the panel the primary enforcer of rules protecting consumers will not work, he said.

“The Fed’s leadership cares first and foremost about monetary policy — that’s in the penthouse,” said Merkley, a member of the Banking Committee who has been an active member of the group pushing for tougher government regulation of credit cards, banks and financial institutions.

“Safety and soundness considerations come next. Then, way down in the basement is consumer protection.  While a new consumer division would presumably have more power and independence, there is no reason to believe that the culture of the Fed will change,” he said.