Big Banks & U.S. Chamber, There's a New Cop in Town

It was a sad day for corporations in the financial, insurance, and real estate sector--like the U.S. Chamber of Commerce & the Financial Services Roundtable--who spent a combined total of $321 million lobbying against federal reforms such as limits on bonuses and the creation of the Consumer Financial Protection Agency (CFPA). These groups were concerned that oversight legislation to help rein in greed on Wall Street might actually....rein in greed on Wall Street. "We remain concerned that this legislation will have significant and harmful unintended consequences for consumers, businesses, and the overall economy," the groups wrote in a letter to House members last week.

Thankfully, the House Financial Services Committee didn't feel nearly as sympathetic towards the creators of unfair financial products that scam consumers and taxpayers as they feel for themselves. A recent poll found that nearly 75 percent of Americans believe that the greed and risky decisions of banks and financial companies led to our financial crisis--and our lawmakers agree. Yesterday, the House voted 39 to 29 to move forward with the creation of the Consumer Financial Protection Agency, to help put a stop to the dangerous and deceptive products and practices that got us into this mess. The House Financial Services Committee also approved legislation that would impose new rules for credit cards by Dec. 1, moving up the date from mid-February. Democratic supporters said moving up the date was necessary because lenders were using the grace period to hike interest rates.

The American Bankers Association joined the Chamber of Commerce in expressing their disapproval for the legislation, saying it would continue to try to make its case against the agency as the legislation moves to the House floor in coming weeks and, eventually, to the Senate. "We still have major concerns with some principal areas" including "the very broad, ill-defined authority that is granted to this new agency that could be used to justify essentially any regulatory action," said Floyd Stoner, ABA vice president for congressional relations.

Creating the CFPA as part of Obama's broader plan to clamp down on Wall Street is an important step towards preventing much of the reckless lending that contributed to last year's near-collapse of the market. "It's been a year since the financial world collapsed and it is now clear that the greed and excess of big banks, the U.S. Chamber of Commerce and their allies could have and should have been prevented," said SEIU's Anna Burger. "Chairman Frank and the Financial Services Committee stood up on behalf of American families by passing legislation to create a strong Consumer Financial Protection Agency--and to prevent business as usual to continue."

According to a recent poll, nearly 75 percent of Americans believe that the greed and risky decisions of banks and financial companies led to our financial crisis.And there's much more to be done. We believe that to be successful, the CFPA must be strengthened to include:

oversight of auto dealers who receive lucrative compensation in financing auto loans;
the authority to examine the books of all financial institutions, no matter what size, without cumbersome barriers;
fixes to the current compensation system which pressures and incentivizes workers to push and sell bad and unneeded products to consumers as a condition of employment; and
the full authority to stop the sale of credit-related insurance policies that are virtually worthless.

That's why when the American Bankers Association meets in Chicago next week, more than 5,000 taxpayers from 20 states will be there to demand an end to Wall Street's appetite for greed.