Washington, DC – As House and Senate conferees begin deliberations on financial reform legislation, the Consumer Federation of America (CFA) today released a ―consumer’s guide‖ to help concerned citizens determine whether the American people or the big banks and other special interests will be the real beneficiaries of changes that are made.
―The recklessness of big banks and Wall Street firms and the unwillingness of regulators to rein in abuses triggered our economic collapse, which continues to cause great hardship for many Americans,‖ said CFA Legislative Director Travis Plunkett. ―The American people are looking to Congress to strengthen consumer and investor protections and restore the safety and soundness of the financial system.‖
The key issues in this conference for consumers are:
Creation of a truly independent consumer financial regulator to rein in abusive lending by banks, credit card issuers, mortgage and payday loan companies and auto dealers.
Strengthened protections for average investors and provisions to bring transparency to credit ratings and the derivatives markets.
―How the conferees decide these issues could tell us a lot about whether the public or special interests are winning out as the bill moves forward,‖ Plunkett said. ―Unfortunately, bank and business lobbyists have spent tens of millions of dollars to defeat and weaken desperately needed financial reforms like these.‖
For example, protections for average investors are on the line because of intense industry pressure to weaken a provision that would require brokers to put customer needs ahead of their own interests when they give investment advice. ―Raising the standards for brokers who give investment advice is the single most important thing Congress can do to protect average, Main Street investors,‖ said CFA Director of Investor Protection Barbara Roper. ―In response to lobbying by brokers and insurance agents, however, this provision got watered down to a study in the Senate, which will do nothing to help investors. We urge conferees to adopt the stronger House provision.‖
―After what the American people have been through in the last 18 months, we deserve a strong pro-consumer and pro-investor law that will close dangerous gaps in our regulatory system,‖ said Susan Weinstock, Financial Reform Campaign Director for CFA. ―We strongly encourage all Americans to follow this debate and let their Representatives and Senators know how they feel about the importance of a strong new financial reform law.