CU applauds proposal on new limits for big banks


Thursday, January 21, 2010

Consumers Union Applauds White House Proposal for New Limits on Big Banks

WASHINGTON, D.C. — Consumers Union, the nonprofit publisher of Consumer Reports, today praised the White House proposal to limit the size and risk-taking abilities of large financial institutions.
The proposal aims to prevent banks from becoming so big that they put the economy at serious risk, citing the reckless practices that helped ignite the financial crisis. The changes would prohibit bank holding companies from owning, investing, or sponsoring hedge fund or private equity funds and from engaging in proprietary trading. The proposal would also put limits on the growth of the market share of liabilities at the biggest financial firms in an attempt to protect taxpayers for the future.
Gail Hillebrand, the financial services campaign manager for Consumers Union, said, “This proposal would help to protect taxpayers by ending unrestrained bank growth and risky trading. Banks should only be as big as the private capital markets can support.”
Pamela Banks, senior counsel for Consumers Union, said, “Big banks will put the heat on Congress to try to kill these proposals, but it’s the right thing to do for consumers, for taxpayers, and for the economy.”
In addition to supporting these new proposals, Consumers Union reiterated its strong support for the President’s full package of financial reforms, including systemic risk oversight and creating a strong and independent Consumer Financial Protection Agency to protect consumers from abusive, unsafe, and deceptive credit and payment products and services.
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Consumers Union of United States, Inc., publisher of Consumer Reports®, is a nonprofit membership organization chartered in 1936 to provide consumers with information, education, and counsel about goods, services, health and personal finance. Consumers Union’s publications and services have a combined paid circulation of approximately 8.3 million. These publications regularly carry articles on Consumers Union’s own product testing; on health, product safety, and marketplace economics; and on legislative, judicial, and regulatory actions that affect consumer welfare. Consumers Union’s income is solely derived from the sale of Consumer Reports®, its other publications and services, fees, noncommercial contributions and grants. Consumers Union’s publications and services carry no outside advertising and receive no commercial support.
Contact:
David Butler or Kristina Edmunson, 202-462-6262
Michael McCauley,– 415-431-6747, ext 126.