Obama Admin Looks To Control Americans’ $19.4 Trillion In Retirement Accounts
Remember that old phrase, “I’m from the government, and I’m here to help”? Well, it looks like we are hearing it again, at least on the issue of keeping Americans’ retirement funds safe. The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in ‘helping’ Americans manage the $19.4 trillion they have put into retirement savings. This would be the agency’s first incursion into the investments of consumers.
“That’s one of the things we’ve been exploring and are interested in in terms of whether and what authority we have,” said bureau director Richard Cordray.
He indicates that many people have had their credit damaged by financial crises, including the mortgage bubble bursting and other unexpected, emergency expenditures. “It may be because of things they did and it may just be because they suffered,” Cordray said. “You know if you lose your home because the rest of your block is foreclosed on, your credit history is affected.”
The bureau claims that it has a “concern” that many Americans, especially those retiring from the Baby Boom generation, may fall prey to scams that will rob them of their retirement. No mention was made about the current and ongoing scam of Social Security.
According to Bloomberg,
The retirement savings business in the U.S. is dominated by a group of companies that handle record-keeping and management of investments in tax-advantaged vehicles like 401(k) plans and individual retirement accounts. The group includes Fidelity Investments, JPMorgan Chase & Co. (JPM), Charles Schwab Corp. (SCHW) and T. Rowe Price Group Inc. (TROW) Americans held $19.4 trillion in retirement assets as of Sept. 30, 2012, according to the Investment Company Institute, an industry association; about $3.5 trillion of that was in 401(k) plans.
The Securities and Exchange Commission and the Department of Labor are the main regulators of U.S. retirement savings vehicles and funds. However, the consumer bureau — established by the 2010 Dodd-Frank Act — sees itself as a potential catalyst for promoting a coherent policy across the government, the people said.
Mark Calabria, director of financial regulation studies at the Cato Institute, said that he didn’t believe the Act gives the bureau specific jurisdiction over investments. However, he indicates that it could step in if other agencies don’t.
“I could imagine the CFPB growing into a role on investment savings if it seems like the SEC is asleep at the wheel,” Calabria said.
There is no doubt that the Federal government can’t manage it’s own fiscal issues and Social Security is a prime example, along with an inability to implement a budget, follow the enumerated powers on what they can spend on, and their utter inability to actually put forward any real spending cuts. So why on earth would anyone want to allow them to manage their retirement funds?