Boulder County Business Report
October 14, 2011
On a related note, consumers are likely to benefit from the plain financial language required by the new federal Consumer Protection Financial Bureau, said Sanjay Bhagat, a finance professor at the Leeds School of Business at the University of Colorado in Boulder.
The bureau in Washington, D.C., aims to promote fairness and transparency for mortgages, credit cards and other consumer-related financial products. It's going to be paid for through bank fees.
But he is opposed to bailing out consumers who say they got “exotic” mortgages. Some pundits in the financial world have discussed a potential mortgage bailout for consumers as part of the national public discussion of the new financial bureau, which opened in July.
Many homeowners who are in trouble now say they didn't understand what they were getting into with the dizzying array of adjustable rates and payback periods and progressively higher payments.
“They want the others to bail them out,” Bhagat said. “What incentive are we setting up in the country if we bail them out where would you get the money to bail them out? We should at least have a public discussion on that.”