Congress will be addressing proposed legislation this week to create a financial agency to protect consumers from foreclosures, misleading and unfair credit cards, loans, and mortgages.
As it stands now, responsibility for consumer protection is divided among agencies, and financial institutions can generally choose which regulator they prefer.
Proposed by Rep. Barney Frank (D-Mass.), H.R. 3126, the Consumer Financial Protection Agency (CFPA) would give consumers a watchdog and protect whistleblowers who dare to speak out about the inside operations of big banks and the financial industry.
Many Americans are still personally suffering the effects of the recession and joblessness while the financial industry enjoyed $17 trillion in loans, bailouts, and guarantees.
After receiving billions in taxpayer-funded bailouts, Bank of America spent $10 billion on a five-day Super Bowl party. AIG took over $170 billion from taxpayer funds, and rewarded employees with $165 million in bonuses including to those traders who were behind the company’s collapse.
The bill would give the agency authority to supervise, examine and enforce consumer financial protection laws including mortgages, credit cards, student loans, auto loads, payday loans, and would ban deceptive practices involving consumer financial products.
U. S. Chamber
Always a defender of its corporate members, the U.S. Chamber of Commerce is spending hundreds of millions of dollars on lobbyists and public relations to oppose the CFPA.
McClatchy Newspapers report that the U.S. Chamber of Commerce is spending about $2 million on ads and a grassroots campaign to kill the agency. As part of an Astroturf campaign, it has led to more than 23,000 letters sent to Congress to date.
The ads claim that a new agency would hamstring even your local butcher from extending you credit.
Last Friday, as he won the Nobel Peace Prize, president Obama called out the Chamber.
“They’re doing what they always do – descending on Congress and using every bit of influence they have to maintain a status quo that has maximized their profits at the expense of American consumers.”
He reminded Americans that only financial institutions, not your butcher will be affected by this agency.
Public Citizen reports the industry has hosted 70 fundraisers for members of Congress and lobbyists have provided at least $6 million in campaign donations.
In These Times reports that the financial services industry has spend $223 million in the first half of this year on lobbying.
It might be working.
Rep. Melissa Bean (D-Ill) will offer an amendment to strip the right of states to have stronger consumer protections than federal law, reports Public Citizen. She reportedly received 43 percent of her $640,000 in donations this year from the financial services industry, according to the Sunlight Foundation, which uses the Internet to show the sources of money in Washington.
The New York Times financial columnist Joe Nocera writes in “Have Banks No Shame?” that Barney Frank has made substantial changes to the proposed legislation, including a provision to force mortgage brokers to offer customers a “plain vanilla” 30-year fixed mortgage alongside an ARM mortgage; would have put bank regulators on an oversight panel; and abandoned the reasonableness standard to ensure customers understand what they are buying.
Consumers Get Active
Public Citizen is sending out an alert to its 100,000 members to contact their representative to back a strong bill.
Americans For Financial Reform is a new coalition of nearly 200 organizations calling on Congress and the administration to rebuild the economy that puts consumers workers and families first.
Heather Booth, executive director of Americans for Financial Reform, calls it a “David and Goliath fight” referring to the push for genuine reform.
When the American Bankers Association meets in Chicago Oct 24 -27th, demonstrators will demand a banking system that puts American people first. Called the Showdown in Chicago, it calls for financial reform now.
The House Financial Services Committee will be marking up the CFPA bills addressing the controversy this week. #