Proposed Consumer Protection Agency Under Siege by Banks

September 25, 2009

(ChattahBox)—Banks, backed by the U.S. Chamber of Commerce’s heavy-duty lobbying campaign, are opposing the creation of a new regulatory Consumer Protection Agency saying, it would result in less available credit for consumers and small businesses.

Weak or non-existent consumer regulations were responsible for the sub-prime mortgage crisis and enabled the bank’s predatory practices, which required many financial institutions to seek a handout of federal bailout funds to survive. Now, banks are strongly fighting any new proposals to regulate financial institutions to protect consumers.

The Obama administration wants the creation of a separate new agency devoted to protecting the rights of consumers, as well as ensuring financial institutions provide its customers with full disclosure of terms and hidden fees with credit cards and mortgages.

The proposed new regulations, as well as a full-time consumer watchdog agency would cut into the banks’ profits. Accordingly, the Chamber of Commerce is leading the charge to torpedo the new agency with a $2 million ad campaign, claiming the new agency would add a new layer of government regulation and the proposed regulations are “…so broad and so ill-defined that the scope of who is covered is incredible.”

Lawrence Summers, the chief economic adviser to President Barack Obama, scoffs at the banks’ scare tacticts comparing their rhetoric to the Republican’s “death panels” nonsense:

“Contrary to some advertisements you may have seen, we have no desire to interfere with Main Street retailers’ ability to provide credit to their customers. That argument is to the financial regulation debate what the Death Panel argument is to the health insurance debate,” said Summers.

The fact that banks are increasing their lobbying efforts to kill the proposed Consumer Protection Agency, signals to advocacy groups that the protections for consumers are sorely needed.

Barbara Roper, the director of investor relations for the Consumer Federation of America said: “If you assume, as I do, that they fear anything that threatens the way they do their business, their ability to profit through the abuse of their customers, then this (legislation) should be taken seriously.”

Source


Comments

One Response to “Proposed Consumer Protection Agency Under Siege by Banks”

  1. dprosenthal on September 26th, 2009 11:40 am

    Just what we need–another do-nothing-right agency.I guess the govt thinks if it it can create enough ‘make-work’ jobs it will solve the unemployment problems. Just check into how many new people have been added to the govt patroll in the last year. Please DC, leave the free market system alone and concentrate on protecting the country from terrorists and unscrupulous politicians

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