Storm brewing over Senate Banking Committee position
Debit cards, student loans, mortgage modifications, the creation of a Consumer Financial Protection Agency; Congress will need to tackle these issues and more when they get back from their August recess.
But a new storm cloud threatens these potential attempts to end predatory lending. Senator Chris Dodd, the current chair of the Senate Banking Committee, has the opportunity to leave this position to assume the chairmanship of the Senate Health, Education, Labor, and Pensions Committee, which became vacant upon the death of Sen. Ted Kennedy.
If Dodd makes this move, the normal rules of Senate seniority would pass the chairmanship of the Banking Committee to Senator Tim Johnson (D-SD) who is no friend to consumers.
While Senator Dodd was the main Senate sponsor of the Credit CARD Act, signed into law last May, and is a strong supporter of the proposed Consumer Financial Protection Agency, the Huffington Post calls Senator Johnson “the banks’ favorite Democrat.” Senator Johnson has a record of opposing legislation that would protect consumers from abusive lending practices, and is a particular champion of the payday lenders and credit card companies based in his home state. Senator Johnson was the only Democrat to vote against the Credit CARD Act this spring.
We hope that Senator Dodd decides to retain his important position as head of the Senate Banking Committee. Failing that, we hope that the Democratic leadership will work to appoint another consumer advocate in this role, instead of passing it on solely on the basis of longevity. Senator Jack Reed (D-RI) is next in line behind Johnson and would be a much better champion for consumers who seek protections from predatory lending.