Fragmented regulatory system encouraged loopholes that brought on the crisis

Written by Tom Feltner on September 24, 2009 - 5:58pm
For years, financial institutions have had the ability to do business under several different charters, giving them the option to choose the regulator that sets the lowest consumer protection standard.  Since regulators are funded from the fees that regulated institutions pay, there was little incentive to drive away banks by introducing stringent consumer protections. Cracking down on banks meant losing the fees that kept the lights on.

Poll: Most In Favor of Consumer Financial Protection Agency

Even in a country where skepticism about government intervention crosses socioeconomic barriers, 57% of Americans support the creation of a “new federal agency to protect consumers who purchase banking and other financial products and services.” This approval was highest among groups who are often the victims of deceptive-by-design financial products: African Americans (79%), Latinos (70%), young adults under 35 (70%), and low-wealth persons (69%).  These groups know firsthand

From the President: Acknowledging our weaknesses can strengthen financial policy

Written by Dory Rand on September 2, 2009 - 2:00am
We are easily confused by having too many choices and too many pages of fine print. We are motivated by unconscious cognitive biases.  Unscrupulous financial services providers play to our human weaknesses with products that trap consumers in a cycle of debt.

How the CFPA Would Support Small Business

Written by Tom Feltner and Katie Buitrago on August 25, 2009 - 11:21am
The agency would require understandable disclosure, not the reams of fine print that has trapped business owners in unfavorable credit card contracts.  It would prohibit unfair and deceptive practices, not let hazardous products like automobile title loans, which many businesses rely on to manage cash flow, slip through regulatory loopholes.  Finally, it would require that lenders offer straightforward financial products, such as transparent credit cards and small business loans, alongside the complicated and price-shrouded products that crowd the marketplace.&n

Illinois Attorney General joins 23 AGs in support of new consumer agency

Written by Dory Rand on August 21, 2009 - 10:15am
We applaud their action to protect consumers from predatory, abusive, and unfair financial practices. Other public servants should follow suit in voicing support for this legislation, which would improve the lives of their constituents and strengthen communities by helping to break the cycle of debt.


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