If you want to see a consumer financial protection agency, now is the time to let your Congressman know how important that protection will be for you. I've seen many comments on WalletPop about how abusive credit card and mortgage practices have hurt people's financial position. Most of those abuses occurred because federal agencies were asleep at the switch.
While consumer protection laws have long been in place, no one agency has the responsibility to be certain these laws are being enforced. Now President Obama wants a new consumer protection agency that would regulate home loans, credit card fees, payday loans and other forms of consumer finance, but the banks are already organizing their lobbying troops to kill the plan. Banks have taken billions of dollars to save themselves, let's make sure they don't kill the one small package geared to consumer protection.
The proposal on the table would strip away all consumer responsibilities that are currently assigned to existing bank regulators, such as the Federal Reserve, the FDIC and the Comptroller of the Currency. Their failure to protect consumers, as more and more exotic mortgages were marketed to consumers, helped to fuel the mortgage bubble that just burst. Clearly their inaction proves the need for an agency that focuses on consumer protection.
We've witnessed the bailout of the banks, so we know how effective their lobbying efforts can be. The banks prefer the soft approach to consumer protection that we've seen from existing agencies. We must be sure Congress sees that consumers want change, by orchestrating a lobbying effort to let Congress know our views.
Right now there is a lot of support from House and Senate Democrats, as well as many consumer groups, for the Obama proposal. The House Financial Services Committee, chaired by Rep. Barney Frank, hopes to complete work on the bill by the end of July and send the bill to the Senate in September.
"I'm very much in favor of it." Frank told The New York Times. "Anyone who thinks we're not going to create this agency is mistaken. The American public wants it."
It's up to us to prove to representatives and senators that Frank is right -- we do want the consumer protection agency. We can only do this by emailing, writing or telephoning our representatives and senators.
Find out how to contact your elected representative here.
Lita Epstein has written more than 25 books including The Complete Idiot's Guide to Improving Your Credit Score.
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