Eighteen former members of the Federal Reserve’s Consumer Advisory Council (CAC) strongly endorsed the idea of an independent Consumer Financial Protection Agency in a letter released last week . Draft legislation released yesterday by Sen. Chris Dodd would instead place the CFPA in the Fed, an idea that the former CAC members specifically rejected.
The letter says that "The Federal Reserve has its hands full with responsibilities relating to safety and soundness and monetary policy." It singles the Fed out for special criticism in its handling of consumer issues under both Democratic and Republican administrations: "In 1994 Congress gave the Federal Reserve the power to outlaw unfair and deceptive practices in the mortgage market. The Federal Reserve waited until 2008 to issue their rule, long after the problem had become a crisis and after the market had collapsed. During that time, we and other consumer protection experts issued reams of comment and testimony calling on them to exercise their authority to protect consumers."
Democracy requires vigorous public debate in an open forum, conducted by leaders willing to take a public stand and face the consequences. Today's proposal on banking reform from Sen. Dodd is the product of backroom negotiation and holds nobody accountable. It allows Senators to dodge one of the most critical issues of the day: the financial security of the American public. more »
Senate Democratic leaders should conduct an up or down vote on the creation of an independent Consumer Financial Protection Agency on the Senate floor, the co-directors of the Campaign for America’s Future said Friday. more »
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tomdispatch.com — What does it mean that we so eagerly slap the label “Ponzi scheme” on those things that most frustrate, infuriate, or confound us? Why do so many Americans feel like hapless investors who have thrown away their life savings to pay off guys at the top whose only goal is to screw over everybody else? It’s an unmistakable sign, at the very least, of a deep, simmering distrust and disillusionment, a dark undercurrent of despair spreading through our culture. The distrust extends as well to the government that finally jailed Madoff and is prosecuting Stanford, but has dealt a free pass to Lloyd Blankfein of Goldman Sachs and Dick Fuld of Lehman Brothers.
With word that Six Senators were expressing opposition to putting direct lending in the budget bill reconciliation -- which only requires sixty votes to pass the Senate -- Rep George Miller, Chair of the House Education and Labor Committee, and Tom Harkin, Chair of the Senate Education Committe, got to work. more »
Senators Webb and Sanders have signed letter urging President Obama to fill empty seats on Federal Reserve Board with nominees who will help balance the Institution. Notably they urge the Pres to find nominees who would break up the big banks, ban usurious interest rates, enforce consumer protections, allow an audit of the fed's bailout operations, put a lid on executive compenstaion. more »
After more than a year of closed-door negotiations, the President and other Democrats have finally appropriated a Republican phrase by calling for "an up or down vote" on the resulting health reform legislation. Great idea - so great, in fact, that we should do even better on financial reform.
This time, let's have an up-or-down vote on each of the vital policy planks that constitute meaningful reform. Instead of having politicians do their horsetrading in private and leaving the public vote until the end, let's have a public show of hands on the vital economic issues of our time.. more »
Sen. Sherrod Brown, head of the subcommittee in charge of overseeing the Federal Reserve, has written President Obama urging him to use the THREE vacancies on the Federal Reserve Board of Governors to make the Fed more accountable. Letter and Huff Post report below. more »
Financial reform, as it is called, shouldn't be all that complicated. Break up the banks deemed "too big to fail," since that offends any possibility of market discipline and puts taxpayers on the hook for future bailouts. Crack down on gambling with other peoples' money in the financial casino. Give consumers a cop on the beat to protect them from the cons and frauds. Tax the big guys to get our money back. Outlaw compensation schemes that give million dollar incentives to make risky bets.