The Fight for Vital Consumer Protections
Tuesday, 01/19/2010 - 12:54 pm by Elizabeth Warren | 9 Comments
As the fight for a Consumer Financial Protection Agency heats up, TARP watchdog Elizabeth Warren explains why the moment is critical.
The story of the financial crisis has a thousand twists and turns, but the basic narrative is easy to follow. The financial industry wrote rules that allowed it to act recklessly. The industry captured agencies that were supposed to regulate it, taking cops off the beat and funneling enormous resources into the political process to make sure there wouldn’t be any new cops. Then, with no laws to hold them back, the banks made hundreds of billions of dollars on the sales of deceptive products.
That went on for years, and the industry’s tricks-and-traps pricing got more and more out of control. Eventually, the sale and re-sale of deceptive mortgages and other dangerous products made trillions of dollars for Wall Street while bringing down the American economy. When the industry’s recklessness brought the biggest banks to the brink of collapse, Wall Street turned to the taxpayers for bailouts and guarantees, which put it right back into big profits and big bonuses. The industry got whatever it wanted.
Now we are coming to the final chapter of this story.
The final chapter will show whether we are going to let the industry continue to write the rules — to keep the cops off the beat — or whether the financial crisis actually changed something.
The fate of the Consumer Financial Protection Agency will be the best way to follow the story moving forward because consumer products were the most abusive and because the CFPA has real muscle to stop those abuses. The CFPA would hire new cops and change the way big banks do business.
We have all worked hard to make the CFPA into a reality, and the next few weeks will determine whether our hard work will make a difference for families or whether families will lose once again. The next few weeks will determine whether families will have to play by rules written by the banks and for the banks — rules that let the industry get away with anything. In my view, we cannot let families lose again.
Like you, I read last week that the consumer agency is dead. I also read the same thing last spring, last summer, last fall, and last month. And I’ve been warned about the power of the banks since I first developed this idea in 2007. We always knew this was a David v. Goliath fight, but I don’t believe that Washington can or will let Wall Street act like nothing has changed.
This is not the last important moment in the fight for the CFPA, but it is a critical one. You can count on me to do my part. Please help.
Sorry Elizabeth, I feel it’s decades too late for a CFPA to fix the problem. If you consider running for high office, however, you have my vote.
Posted by Clampit | January 19th, 2010 at 3:49 pm
I can concur with the 1st poster, if you ran for office you’d have my vote, if I was an American. I am a Canadian and very happy to be at this time in history.
BUT, unlike the 1st comment, it is NEVER to late to effect or work to implement change for the better. One cannot accept that it is ‘too late’ for change.
We’ve (humanity) have suffered through worse and risen like a phoenix from what looked to be a pile of ashes.
Americans need to rise up in a unified voice and demand that true ‘change’ occur.
Posted by funkright | January 19th, 2010 at 10:23 pm
Elizabeth, the last sentence says “Please Help”. As an ashamed Massachusetts resident, I would very much like to do my part. How can we help?
Posted by RichD | January 20th, 2010 at 1:54 pm
Elizabeth, I hope you are right that the CFPA is still passable, but, even if it does become reality, it will, to my understanding, only regulate future activity. Personally, I will not be satisfied unless some retroactive retribution is devised, to prosecute the bankers for their past behavior and recoup not only the bailout funds but the years of illegal profits they raked in at our expense.
Posted by PamG | January 20th, 2010 at 9:23 pm
CFPA does not hold the power to fix the ‘problem’.
We need to end the FED and rebuild our Government from the ground up.
And DITTO: Consider running for President, you and Alan Grayson would make one hell of a team and have my vote!
Posted by EndtheFE D | January 20th, 2010 at 11:02 pm
Is The U.S. Economy Being Tanked By Mistake or By Intent?
http://mikechamberslive.com/?p=4224
Posted by Whoops | January 20th, 2010 at 11:11 pm
Give ‘em Hell, Elizabeth!! You’ve got my support. You and Brooksly Borne are my heros.
Thanks for your work on behalf of America.
Posted by Carol Erickson | January 20th, 2010 at 11:14 pm
http://www.economicpolicyjournal.com/2010/01/secret-bank-bailout.html
Posted by Whoops | January 22nd, 2010 at 4:29 pm
I have tweeted all day about this. I have called Senator John Kerry and Senator Brown.(I live in MA) I have emailed Senator Dodd. I have posted on several blogs, including my own, and I have posted this on as many facebook pages as possible.
The banking lobby is too strong. But the will of the people is stronger.
The people do not know about this. They really don’t see the importance. This is so way beyond party rhetoric.
Posted by Janice Nelson | January 27th, 2010 at 4:29 pm