Consumer protection merry-go-round

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Reports about consumer protection in the Senate Banking committee’s Wall Street reform bill are ever-shifting. It’s time for Committee Chairman Chris Dodd to tell us where he stands.

Back in November, Chairman Dodd released a bill that included a strong, independent Consumer Financial Protection Agency with full rulemaking, examination and enforcement authority to rein in the kind of abusive, deceptive lending practices that helped drive the economic collapse. By the time January came around, the news had shifted, with stories that he was on the verge of abandoning the CFPA. New reports resurrected the Agency from the near-dead when Senator Dodd announced at the beginning of February that he was moving forward with a draft bill. Then last week the consumer regulator was in question once again, as Dodd announced new discussions.

As I wrote in a letter to Chairman Dodd, it would be a disappointing and embarrassing end to more than a year of work on a financial regulatory overhaul were he to propose a bill that provides less consumer protection than even the nation’s largest bank is willing to accept.

The CEO of Bank of America told President Obama this month that his company does not oppose creation of a Consumer Financial Protection Agency. Also this month, in written testimony to the banking committee, retired Citigroup Chairman John Reed directly endorsed a consumer regulator, stating that to reduce the likelihood of a repeat crisis and support a healthy industry, “There is good reason to create a Consumer Protection Agency with a clear and separate mandate.”

So it’s time for Senator Dodd to make his position on consumer protection clear. Time to re-affirm his commitment to a strong Consumer Financial Protection Agency with the authority to write new rules of the road for big banks, and the teeth to enforce those rules. It’s a simple decision: Strengthen consumer protection or preserve the
status quo.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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