Re: "Do Safety and Soundness and Consumer Protection Really Conflict?" [March 30]: Up to now, the answer to that question indeed has nearly always been no. If Congress creates a new independent (read: "unaccountable") federal financial consumer bureau the answer would increasingly be yes. That would be unfortunate for the safe and sound supervision of banks and for the nation.

Currently, both safety and soundness and consumer protection are part of an integrated program of bank supervision. No surprise, then, that few examples can be found of conflicts between the two. Our integrated regulatory program works to prevent such conflicts. Differences in perspectives are kept from becoming differences in policy, becoming instead part of a coordinated program. That is to say, all things considered together, there is no reason for a conflict.

The plan to disintegrate bank supervision by the creation of a federal consumer bureau means that no longer will all things be considered together. Costly conflicts will arise. Consider Fannie Mae and Freddie Mac. Until very recently, their housing goals were set by the Department of Housing and Urban Development, separated from the safety and soundness supervisor. As the housing goals were ratcheted up, Fannie and Freddie were drawn toward riskier investments that helped land them in federal conservatorship. This is an expensively learned lesson. (Congress in 2008 unified responsibilities in a single regulator.)

Similarly, "ability to repay" has long been a staple of safety and soundness supervision. In the 1990s, however, consumer advocates pushed hard to expand credit access by lowering standards. Bank regulators were less willing to accommodate these demands, so mortgage origination market share shifted to nonbanks.

These conflicts came about when either safety and soundness or consumer protection were given insufficient consideration. Rather than create and reinforce separation, we urge that Congress improve consumer protection and safety and soundness supervision by integrating the supervisory process further.

Wayne Abernathy, executive VP, financial institutions policy and regulatory affairs, American Bankers Association

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