More Ass Covering by the Fed

As I have noted before, now that Congress is looking at having an agency dedicated to protecting consumers from the worst excesses of the banking industry, and the Federal Reserve Feels believes that this role belongs to it.

Of course, the history of the Fed over the past 40+ years is that they believe in dismantling consumer protections, so their record is less than stellar.

In response to numerous proposals which would make consumer protection more formal in financial markets, which they see as a reduction in their bailiwick, they have continued to make "a day lat and a dollar short" regulations in an an attempt to convince Congress that they do not need to assign this task to some other agency.

Case in point, is how, after decades of skyrocketing fees and increasingly punitive "overdraft protection" schemes, Bernanke and his merry band have decided to clamp down on overdraft fees:

The Federal Reserve is likely to soon pass new rules making it harder for banks to hit customers with fees for overdrawing their accounts, a top official told a Senate subcommittee Wednesday.

Note that it appears that these rules will require that banks have customers positively affirm their desire to opt in to overdraft protection.

It's amazing what the prospect of some regulatory competition will do to a bureaucracy.

Earlier posts on the subject here.