Avoiding Reform Like the Plague
The bankers are at it again (and again and again), doing their best to waylay reform even as they say they favor increased consumer protections.
Sunday’s Boston Globe featured a story on the industry’s attacks on the proposed Consumer Financial Protection Agency. The article described the use of scare tactics and political clout to kill the best hope in decades for meaningful regulation of consumer lending. .
Travis Plunkett, legislative director at our Partner the Consumer Federation of America, told the Globe that “What is surprising to me is that some members of Congress are letting [the banking lobbyists] get away with flimsy arguments. They are using many of the same arguments that they were using before the financial crisis”
For proof of the extreme measures the industry is taking to scare away support for the CFPA, look no further than the ads being run by the Chamber of Commerce, which portray the CFPA as a threat to friendly neighborhood merchants that allow their customers to run up a tab (the ads feature a smiling butcher). In fact, retail merchants will not be regulated by the CFPA. White House National Economic Council Director Larry Summers decried these ads as the financial regulatory equivalent of the “death panel” ads used to fight healthcare reform
Who, exactly, is behind this strong, stealthy, and steady fight against reform?
The Globe reports that “most of the 19 largest financial institutions that have received bailout money are spending heavily to fight or influence the regulations.” The Globe notes that megabanks Bank of America, Citigroup, and Wells Fargo spent an average of $2.0 million dollars each on lobbying during the first half of this year, compared to just $50,000 spent on lobbying by the Consumer Federation of America.