USA: don’t turn financial watchdog into big bank lapdog says CU
19 May 2011
Consumers Union (CU) of the US recently sent letters urging
members of the US Congress to stand up for consumers and oppose
recent legislative attempts to undermine the new Consumer Financial
Protection Bureau (CFPB). The letter came as the organisation
unveiled full-page ads in prominent national newspapers warning
that bills making their way through the House of Representatives
would put the CFPB on a short leash, turning the bureau from a
consumer watchdog to a Big Bank lapdog.
Ellen Bloom, the senior director of federal policy and CU's
Washington office said, "The Consumer Financial Protection Bureau
was created after shady subprime mortgages triggered a record
number of foreclosures and ultimately our financial crisis.
American families have already paid a steep price for years of lax
oversight of credit card scams, hidden bank fees, and other
financial rip-offs. Consumers need this watchdog, but
opponents want to put a muzzle on the CFPB before it even gets
Pitfalls of bills
The letters, sent to members of both the House and Senate,
address the pitfalls of the three bills passed last week by the
House Financial Services Committee that would hamstring the CFPB's
ability to rein in abusive financial practices. One bill
would replace the CFPB's director with a five-member commission,
bogging down the bureaucratic structure, while another bill would
make it easier for a panel of financial regulators to reverse
actions of the new agency. A third bill would prevent the agency
from using its new authority in July unless it is led by a
Senate-confirmed director, a move that would unduly politicize and
delay the operations of the CFPB.
The House Financial Services Committee's approval of the bills
followed a pledge by 44 Senators to vote against any
nominee to head the CFPB unless the President agreed to similar
changes that would ultimately limit its ability to protect
"As we have seen from our most recent economic downturn, strong
consumer protection is essential for a strong financial system.
Congress should stand with consumers, not the big banks and Wall
Street firms…We strongly urge you to oppose these bills," Bloom
writes in the letter.
CU has been stepping up it's support for the CFPB as it comes
under pressure on a number of fronts, including new proposals for
simplified mortgage disclosures and a national complaints system,
as recently covered by the Washington Post and Bloomberg News.
For more information on CU's campaign, see www.DefendYourDollars.org
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