SUPPORT CREATION OF A CONSUMER FINANCIAL PROTECTION AGENCY
October 7, 2009
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After meeting an estimated 20,000 consumers in the past 27 years that were facing financial problems, and filing bankruptcies for about 8,000 of them, I’m a member of AFFIL, the Americans for Fairness In Lending. I’ve seen the vast disparity in bargaining position that exists between consumers and the lending industry. There needs to be more regulation of the lending industry, to stop the kind of financial meltdown that almost took our entire economy down the tube.
Along with AFFIL, I am in favor of a new Consumer Financial Protection Agency whose sole and only job, will to be to protect consumers. Please read their email message below, and use it to send an email to your Congressman to vote for the creation of the agency. (click on Write to your Representative, when you see the link).
AFFIL email message:
It’s a numbers game, and consumers are losing.
Currently, the financial industry is overseen by eight agencies. Each agency has limited enforcement and rule-writing power, resulting in a system that employs lots of potential “watchdogs”, none of whom barked during the long buildup of abusive lending that led to the collapse of the entire financial system. To make matters worse, these agencies have multiple responsibilities, with consumer protection far from the top of their lists.
With responsibility spread so thin, no single agency was able to stop predatory lenders, prevent random and abusive credit card interest rate increases and credit limit cuts, and prevent the financial crisis we’re dealing with today. For a graphic illustration of the current regulatory mess, look no further than this diagram (pdf) put together by our Partners at the Consumer Federation of America. It shows the existing structure, as well as the ideal arrangement under a new CFPA.
In addition to streamlining the regulatory process and creating a level playing field for all lenders, the CFPA would also finally allow for the federal regulation of payday lenders, mortgage brokers, finance companies, and other nonbank providers who have previously slipped through the cracks. Write to your Representative today about the need for a CFPA.
The lending industry claims that working within the confines of rules set down by a potential Consumer Financial Protection Agency would be expensive and impractical. They say that they like the current system, the one where they get to pick and choose between eight agencies who then observe without responding. In reality, the CFPA will streamline the regulatory process, creating a single set of rules for all lenders and all products.
What are financial lobbyists really worried about? I’ll give you a hint: it’s not the paperwork.
It’s the fact that a Consumer Financial Protection Agency would dramatically cut down on predatory lending and abusive lending practices, those tricks and traps that make billions of dollars for the lending industry at the expense of consumers.
The House Financial Services Committee is set to vote on this important issue next week. Write to your elected officials today to make sure your voice is heard and considered before they cast their vote.
Best regards,
Sally Brzozowski
Staff Organizer, AFFIL
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Support Creation Of A Consumer Financial Protection Agency
