Shorter Tim Geithner: Buyer Beware–like, seriously beware–because the banks can do pretty much whatever they want, and they don’t have to tell the consumers anything if they don’t want to.

When asked by Sen. Ron Wyden (D-OR) whether buyers of financial products are entitled to know whether the sellers, the banks, are betting on those products to tank, Treasury Secretary Geithner doesn’t “want to say exactly.” Through repeated attempts by Wyden, Geithner never answers with an unequivocal “Yes.”

Even shorter Geithner: The house always wins.

Full transcript below. . . .

Senator Wyden: Mr. Secretary, of course we’ve got, a major financial reform bill on the floor, it has provisions obviously involving taxes and regulation. What I am most interested in is the question of transparency and accountability to American consumers and institutions. and let me start by asking you whether you believe that a buyer has a right to know that their banker is selling them a product that it is betting against.

Secretary Geithner:  Senator, I would say this, I think it is very important that we strengthen disclosure requirements across the financial system, that the SEC has the authority, stronger authority to impose strong disclosure requirements, and stronger obligations frankly on institutions that provide financial services sell products to their customers whether retail investors individuals or sophisticated investors across the country. And we’d be happy to work with you on any proposals to help make sure we are achieving that objective.

Wyden: Here’s what’s going on. I filed an amendment on this and i’m asking this for a reason. You’ve got banks trying to sell products to clients, products that the banks are betting against without telling the client that the bank is betting against the product. Now we can have a debate about the details of it, but I’d like to you say yes or no whether you think the buyer has a right to know that a product is being sold to them that the bank is betting against.

Geithner: Well Senator, I have an almost perfect record in responding to your questions in hearings even with amendments I completely agree with I generally don’t endorse them in the context…

Wyden: I’m not, I’m not asking…

Geithner: Hold on, without looking at them first. But I will study your amendment very carefully. and I would say the following: I completely agree that firms should have access to information about not just the risk in the investments but any conflicts that may apply in that context. Happy to work with you on that broad objective, I share your your objective, uh…

Wyden: You share the objective that the buyer has the right to know. I’m not asking about whether you support the amendment, but on the question of the buyer having a right to know that a bank is selling them something they are betting against, you think the buyer has a right to know…

Geithner: I don’t want to say exactly that way just because how difficult this is and complex but on the basic principle that the buyer should have access to information they need to make an informed decision about the risks they are taking, absolutely they should have access to that information.

Wyden: And clearly, access to that information involves knowing that a bank is actually betting against it. I mean, people, [Mr.] Secretary, people are slack-jawed on this particular proposition. I happen to think this is pretty complicated stuff, and that’s why in my amendment we give the oversight board a lot of discretion in writing the rules. But I think this is one that is fundamental to passing the smell test in this country with respect to basic fairness so I hope we can work this out and look forward to working with you. We’ve done a lot of work together and I want to work with you on this as well.