Alan Blinder is emerging as the Federal Reserve Board's expert on consumer regulation.
This newfound interest comes as a surprise, especially because many consumer activists had written Mr. Blinder off when he didn't create any waves during the months immediately following his June 1994 appointment.
But Mr. Blinder now is spearheading the revisions to consumer leasing and Truth-in-Savings rules - endeavors that are starting to win him respect from the banking and activist communities.
He also has taken a seat on the three Fed committees that handle regulatory matters - consumer and community affairs, bank supervision and regulation, and derivatives. These committees propose policy changes to the Fed board.
But President Clinton's first central bank appointee started speaking up last year. He has focused most recently on the consumer leasing rules, which he wants expanded to include more data on the total cost of an auto. The changes would allow consumers to compare leasing with buying, he said.
"I am very comfortable with the philosophical premise that this is an appropriate function of government," Mr. Blinder said in a recent interview. "One of things people have governments for is to help them get the information they need to make a decision."
Mr. Blinder should be around for awhile to enforce that view of government, even though his term expires Jan. 31. Most Fed watchers say they expect President Clinton to package the renomination of Mr. Blinder with that of Fed Chairman Alan Greenspan, whose term expires March 31.
Renomination will ensure that consumer leasing remains a hot topic at the Fed. During debate on a September 1995 consumer leasing proposal, Mr. Blinder successfully added a provision asking if companies should compute an annual percentage rate for leases. This figure would be analogous to the APR lenders must now disclose on loans.
The industry has vigorously fought the APR. The formulas require lenders to determine the value of a vehicle at the end of the lease, and the cost of insurance. Those vary by applicant and car, making a uniform calculation impossible.
Mr. Blinder conceded that any effort at consumer-protection must account for the cost to the industry and the benefit to society.
"You have to respect the burden you are placing on people who are providing the information," Mr. Blinder said. "You want the rules to be as simple as possible and unburdensome as possible."
Consumer and banking groups are just becoming comfortable with Mr. Blinder's new role.
"We need someone at the Fed who will speak for us," said Janice Shields, the head banking researcher at the Center for the Study of Responsive Law, a Ralph Nader organization. "If his opinions on consumer leasing are any example, then hopefully he will represent the consumer's view and educate the other governors."
James D. McLaughlin, director of agency relations at the American Bankers Association, said he's been impressed with Mr. Blinder so far.
"He's willing to ... think things through on his own," Mr. McLaughlin said.
Mr. Blinder, who spent most of his professional life as an economics professor at Princeton University, said these consumer rules fascinate him. "There are no perfect solutions," he said. "The question is which of several imperfect solutions should be adopted."
