President Barack Obama today signed an executive order setting up a new presidential board that will support financial products and services deemed beneficial to consumers.
The Advisory Council on Financial Capability will consist of officials from the Treasury and Education departments and as many as 20 non-government presidential appointees, including financial service providers, consumers and educators, according to the order released by the White House.
The council, which will be under the auspices of the Treasury Department, will advise the president on financial education and “promote financial products and services that are beneficial to consumers, especially low- and moderate-income consumers,” as well as promote understanding and effective use of financial products, according to a release issued by the White House.
As a key component of his financial services regulatory reform proposal, Mr. Obama has called for creating a consumer protection agency that would have the power to issue regulations on mortgages and credit cards. The proposal, which is part of the financial reform bill passed Dec. 11 by the House, appears to be stalled in the Senate.
The new council will not have the regulatory powers that the proposed Consumer Financial Protection Agency would have. But, as Marilyn Mohrman-Gillis, managing director of public policy for the Certified Financial Planner Board of Standards Inc., pointed out: “You can achieve public policy goals through a variety of different ways.”
She added that the new council is a “grass roots” public-private partnership that has some of the same goals as the CFPA.
The new council is consistent with the goals of the Financial Planning Coalition to set up an oversight board for financial planners, Ms. Mohrman-Gillis said. “This executive order is intended to develop the capacity in individuals to have access to and understand financial products and services and allow them to make informed choices,” she said.