As we’ve discussed here in the past, if we’re to avoid financial disasters in the future, it’s absolutely essential that the banking reform bill presently being discussed within the Senate Banking Committee establish a strong, independent Consumer Financial Protection Agency. Unfortunately, it looks as though some Democrats might be willing to trade it away in the name of bipartisanship. Here’s a clip from tomorrow’s LA Times:
…Creating a powerful and independent consumer agency, which is strongly opposed by the financial industry and Republicans, has been the major roadblock in drafting a bill that could pass in the Senate. Desperate to surmount that hurdle as this year’s legislative clock winds down, Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) floated the idea this week of putting the new agency in the Federal Reserve…
Where, I should point out, it would essentially be answerable to Wall Street. Here, on that subject, is more from the LA Times:
…Dodd himself and other supporters of the consumer agency have criticized the Fed’s previous inaction as a main reason for creating such an entity, noting that the central bank took 14 years before enacting rules in 2008 to protect consumers from unscrupulous mortgage lending…
Fortunately for us, Elizabeth Warren, the chair of the Congressional Oversight Panel created to oversee the U.S. banking bailout, isn’t sitting quietly on the sidelines. No, the 60 year old Harvard Law professor is urging Democrats to fight, even if it means getting some teeth shattered and losing some blood. Here’s a clip from the Huffington Post, where Warren was interviewed today:
…”My first choice is a strong consumer agency,” the Harvard Law professor and federal bailout watchdog said in an interview with the Huffington Post. “My second choice is no agency at all and plenty of blood and teeth left on the floor.”
There’s been a steady leak of Senate proposals to fix the dysfunctional way federal regulators protect consumers from abusive lenders. One was an independent unit housed within the Treasury Department; another was a new entity, housed in the Federal Reserve, with little independence or power.
The Senate shouldn’t waste its time, asserts Warren, explaining that current proposals fail to address some of her key priorities such as arming the proposed agency with independent rule-making authority, without interference by bank regulators.
“My 99th choice is some mouthful of mush that doesn’t get the job done,” Warren said…
I like Elizabeth Warren, and hope that her message is getting through to members of the Senate Banking Committee. (To contact your Senators, just click here.)
I can understand why the Wall Street firms would fight tooth and nail to undermine the creation of an independent watchdog organization, but I don’t get why the Republicans are so anxious to shoot down the idea. I mean, I know that they’re dependent on the support of these firms, and beholden to their lobbyists, but it seems to me that it would be a difficult vote to explain to one’s constituents. Sure, they may be inclined to think the establishment of a Consumer Financial Protection Agency is “anti-business” or, worse yet, “a step toward Socialism,” but I’ve got to think that they’d be willing to put those concerns aside if they understood that this entity would ensure that their credit card companies couldn’t jack their finance rates up 30% with no notice. But maybe I’m giving them too much credit. I suppose it’s possible, in some places, that people love Capitalism so damn much that they don’t mind being fucked by corporations.
And, on that happy note, here’s a little documentary video footage shot last night in White House… It seems as though our last six Presidents – even the dead ones – want a Consumer Financial Protection Agency.
[note: This post violates my No Chevy Chase rule. I'm sincerely sorry about that.]