Chalk One Up For the Good Guys
By Consumers Union on Wednesday, July 28th, 2010
Since the start of this Great Recession (actually even before) we’ve asked you to email, call, write, or track down your lawmakers in person to tell them to fix the big financial market problems that cost us all so much—taxpayer bailouts, spiraling credit card rates, collapsed mortgages, confusing contracts, endless fees.
Your overwhelming response put grassroots’ pressure on decision makers in every corner of the country. Combined with the Defend Your Dollar team’s expertise and help by a great coalition of other organizations, we now have major financial reform to be proud of. Not only did we see passage of the Credit CARD Act in 2009, the President just signed financial reform that strengthens every sector of the financial system and gives you some new pocketbook protections.
We did not win every fight but we did win on three top priorities:
• The Consumer Financial Protection Bureau (CFPB): Will write the rules for nearly every type of loan and bank account, so that you get the same protections regardless of the type of financial institution you use, including all banks over $10 billion in size. That means that the enforcement of your new credit card protections will finally be in the hands of officials whose job it is to care about consumers, not just about the banks and mortgage companies.
• Ends taxpayer bailouts and provides real oversight of the biggest banks: The government will have the authority to step in and safely shut down any financial firm that is so interconnected to the rest of the financial system that its failure could drag down our economy. The goal will be to protect the system, not the bank, and to do it without the taxpayers footing the bill. To prevent failures in the first place, there will be stronger capitol requirements for banks and important “non-banks.”
• Ends secret derivatives: This bill moves most derivatives trading onto exchanges, adding transparency and better information about how much risk is being created. It also places new restrictions on some of the bank’s riskiest activities.
But the well-funded bank lobbyists have not stopped fighting just because the bill passed. They will take every opportunity to weaken consumer protections during the implementation process. They will fight for pro-industry leadership as new regulators are appointed. They will fight for the weakest possible interpretation of the new law as agencies begin to roll out implementing regulations. They will argue for loopholes.
Over the next few weeks and months, we’ll be tracking all this and asking for your help!
• The President will have to appoint the director of the CFPB and choose a new head of the Office of Comptroller of the Currency, the agency that still supervises national banks.
• The Federal Reserve Board and other agencies will roll out regulations on key economic issues such as capitol and risk requirements for banks and systemically important non-banks so that they don’t bring down the financial system. And they will need to set standards to reduce risky mortgage lending.
• When the CFPB gets up and running, it will need to define which financial practices are deceptive, abusive, or unfair.
• State legislature will consider additional consumer protections.
Every time we asked for more you answered and consumers won. So Thank You! And let’s make our new protections as strong as possible in the coming year.