CFPA Gutted by Democrats

The Consumer Financial Protection Act (CFPA) has been gutted by Democrats. Yesterday, the House Financial Services Committee, approved an amendment to exempt 98% nation’s banks from oversight by a new agency created to protect consumers from abusive or deceptive credit cards, mortgages and other loans. So, small banks and credit unions don't commit fraud or implement deceptive lending practices. Is there a proof or evidence of a correlation between size of a financial institution and its likelihood to implement fraudulent practices. I didn't know greed and recklessness was limited to financial conglomerates.

Oh, but it gets better. Now that the Democrats have gutted the CFPA they are trying to just kill it. New Democrats Caucus lead by Rep. Melissa Bean, Wall Street's favorite Democrat, are considering an amendment that would preempt states from enforcing their own sometimes stronger consumer protection laws.

The CFPA, as originally proposed, attempted to establish a regulatory floor that allowed states to pass or enforce stricter consumer protections. The idea was to specifically address the situation that was transpiring in early 2000s when predatory lenders were running for cover and protection from some states' stricter consumer protection laws. They turned to federal regulators who were eager to help out the predatory lenders and preempt states' rights to protect their citizens.

The Bean Amendment would basically re-enforce the status quo. If this Bean Amendment passes what is the point of the CFPA? It would become a useless and toothless regulatory agency. Why bother at that point?

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unreal

Looks like the corporate lobbyists have their finger puppets (called Congress) back in line.

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I am tired of this meme about hurting consumers because

it will make credit cost more. Woo, maybe that is a good thing. We see what cheap credit does. Second, this may be true in the short-term but in the long-term lenders will adjust and competition will kick in and lending rates will go down.

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spin masters, should be their predatory profits less

These lobbyists are beyond belief spin masters. They rain so called "white papers" on Congress like snow.

The problem is one needs to read each one of these things to realize the data, statistical and logic flaws and even worse, they have some think tank arms to help them in the snow job.

So, what they really mean is it will cut into their predatory profits and mess with their short term quarterly profits.

Who cares if it destroys the U.S. consumer base long term? Who cares if it causes families to go bankrupt and homeless?
Who cares if it all takes away from a production economy because hell man, they must make their short term quarterly profits and this is what they came up with, predatory financial agendas.

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Meme what?

Are you being sarcastic? Your comment makes no sense, especially since you started the thread by posting the information about Melissa Bean helping gut federal regs.
And cheap credit? Maybe for mortgages, but have you paid any credit card interest lately?

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No haven't paid credit card interest lately. But..

financial conglomerates were raising credit card fees early on in this crisis to compensate for their huge losses.

They are using much needed consumer protection regulations as the reason for their increases but these increases in credit card fees are a result of their business practices not regulations.

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Historically, my guess is this meme was common when

ever there was debate about past consumer protection legislation such Truth in Lending or other past legislation. Consumer credit survived and I am sure consumer credit would survive a strong CFPA but it looks like we are not going to get a strong CFPA.

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now, now

In the EP FAQ, some of the site rules are "when in doubt, use a calculator" and "be good to each other". We do not do "flame bait" in the comment section on EP (unless of course it's against Goldman Sachs and so forth).

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It's time for the Obama Administration to fight

time to back up all that rhetoric with actions. They passed on derivatives legislation.

This is a huge fight - will they provide the countervailing force necessary to hold back the financial oligarchy or will it continue to talk a good game and protect the financial oligarchy.

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Score one for the good guys????

I trying to find the Rep. Melissa Bean's amendment but it sounds like it may have been modified and banks are not happy.

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Taibbi: Elizabeth Warren for President

I am not sure I agree with the title but I definitely agree with the substance of the article:

But most importantly, he came into office amidst sweeping crises in the financial sector and did not do what needed to be done, and what had been done the last time the U.S. was sent careening into a depression because of Wall Street: he failed to push for tough financial reforms. Barack Obama needed to be the FDR figure who remade the American capital markets and made them fair again, and he barely laid a finger on the whole scene.

Instead, he put the people who created the problem in charge of fixing the mess, and ended up bailing them out instead of the rest of the country, at huge current and (presumably) future cost.The total bill for the Bush-Obama bailout is certainly above ten trillion at this point — Inspector General Neil Barofsky thinks it might hit nearly $24 trillion ultimately — and this went through without much fanfare. Meanwhile, the congress is stuck in the mud, panicked at the thought of paying three or four trillion over a decade or so for a health care program.

None of this is new news. What is new is the question of what to do about it. I’m personally of the opinion that our main problem lay with the fact that the Democratic Party as currently constituted is more afraid of losing the financial support of Wall Street and the health insurance industry and the pharmaceutical industry than it is of losing progressive voters. In fact, I think I’ve put that wrong, because it implies that the Democratic Party pushes the agenda of industry insiders out of fear. That is a misread of the situation, I think.

I think they prefer those people to their voters. I think they feel more comfortable with them. I heard a story recently from a Democratic Party operative who tells me that certain members of one of the president’s cabinet departments only got wind of how hard it is out there for ordinary people to pay their bills when they invited in a major corporation to give them a presentation about their financial outlook for the holiday season — and through that report found out that this company’s prospective customers were spending less because large numbers of them had been laid off, or had huge medical bills, or had maxed out their credit, and so on.

Pres. Obama reportedly raised almost $2 million this past week at a Wall Street fundraiser. Nice chunk of change for someone who should be fighting for us. Oh yeah, what do politicians say about corporate special interest donations? I think they say it doesn't influence their decisions.

Sure. Tell that to all your middle class constituents when they are flat broke and living in tent cities because of the next crisis that you failed to prevent because you were more interested in protecting your contributors instead of your constituents.

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