-- Letter Shows Bankers Prefer “Failed Business As Usual System” --
SACRAMENTO, Cal., July 27 – At the epicenter of the worldwide financial collapse was a lack of consumer protection that can best be remedied by establishing a “game-changer agency with only one job, protecting consumers” while simultaneously reinstating federal law as a floor not a ceiling of protection, according to CALPIRG.
At a tele-news-conference today, Pedro Morillas, CALPIRG’s Legislative advocate, was joined by Chairman of the CA Assembly Banking and Finance Committee Pedro Nava who explained that the [Obama-backed] Congressional proposal to establish a Consumer Financial Protection Agency would also allow state attorneys general to once again vigorously defend the public against unfair financial practices. That authority had been drastically restricted by federal agency preemption rulings prior to the crisis.
“Since the financial crisis peaked in 2008, banks have been bailed out with billions of dollars of taxpayer funds but haven’t increased lending and haven’t stopped increasing unfair credit card and deposit account fees on consumers and small businesses,” said Morillas. The solution is to create the Consumer Financial Protection Agency, a game-changer agency with only one job, protecting consumers.”
Chairman Nava described how preempting state legislators from passing stronger laws and eliminating state Attorney General authority over national banks exacerbated the crisis. “State Legislators and Attorneys General are on the ground in the states and are held accountable by the people. This proposal will restore the ability of individual states to protect people from another crisis.”
“Worse, banks and big corporations are mounting a massive campaign [letter from 23 associations] to preserve the failed business as usual financial system,” added Ed Mierzwinski, XPIRG’s federal Consumer Program Director, also on the call. “One of the top bank lobbyists says their goal is nothing less than “to kill” the new consumer agency. They don’t have the money to make loans, but they do seem to have enough money to lobby against what could be the biggest reform since deposit insurance in the 1930s.”
The proposed Consumer Financial Protection Agency is based on an idea from Harvard Law Professor Elizabeth Warren. If enacted, it would consolidate all consumer protection activities involving over 20 laws and at least 7 agencies into one agency only responsible for consumer protection, while also redefining federal law as a floor not ceiling of protection and re-establishing the right of state attorneys general to enforce federal financial laws.
“We have an agency to keep toasters from exploding, but we don’t have one to keep credit cards and mortgages from exploding,” concluded Pedro Morillas of CALPIRG
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CALPIRG is a non profit consumer group dedicated to standing up to powerful interests on behalf of Californians’ health and wellbeing.
CALPIRG and the federation of state PIRGs, U.S. PIRG, are founding members of Americans for Financial Reform (ourfinancialsecurity.org), a 200-group strong coalition of the nation’s leading consumer, civil rights, labor, community and investor protection groups.
