Rumored Warren role in new Consumer Financial Protection Bureau is welcome news

Warren

From David Arkush, director of Public Citizen’s Congress Watch Division:

Reports that President Barack Obama will give Elizabeth Warren a major role in establishing the new Consumer Financial Protection Bureau are welcome news. Warren offers the promise of what financial consumers need most – a tough advocate to clean up an industry that has made unfairness and deception its core business model.

The details of the post are unclear, but early indications are positive. Warren would serve as an assistant to the president and a special advisor to Treasury Secretary Timothy Geithner. It is important that Warren answer directly to the president and have his ear, not merely work within the Treasury Department.

We are disappointed that the president has not nominated Warren to direct the agency. It is understandable that some might view confirmation as difficult at present, given Senate Republicans’ persistent and arbitrary obstruction of so many nominees. But Warren is confirmable, and a fight over her confirmation is worth having. The big banks and their supporters in Senate would be foolish to oppose her with the American public watching. Warren would emerge from the fight not only confirmed, but even better known and therefore strengthened as a national champion for consumers. We urge President Obama to nominate her.

Note: Public Citizen launched a petition drive urging Obama to nominate Warren to run the new consumer financial protection agency. Last month, we delivered more than 15,000 signatures to the White House.

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Let’s hope Elizabeth Warren gets “The Colbert Bump”

Famed comedian and talk show host Stephen Colbert has long acknowledged “The Colbert Bump,” meaning the increased popularity of a person, website or issue after appearing as a guest or discussed on his show, The Colbert Report.

Here’s hoping that’s the case after last night’s show, because Colbert discussed a few issues near and dear to our hearts here at Public Citizen.

First, he discussed the new Consumer Financial Protection Bureau, created with the new Wall Street reform law, and mentioned Elizabeth Warren as liberals’ pick to head the new agency. (Public Citizen thinks she should.) But then — BAM —

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Mortal battle with Wall Street

This week the stakes are high. As the House prepares to vote on the financial reform we’ve been fighting for all year, Wall Street and the big banks are making every attempt to kill it.

We urgently need calls and emails to reps in the House with the message: Vote YES on the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173), YES on strengthening amendments, and NO on any amendments that would weaken consumer protections or oversight of the financial industry.

The House Financial Services Committee spent months deliberating, debating, and voting on the Wall Street Reform and Consumer Protection Act. While some improvements to the bill are needed, Public Citizen and our coalition of more than 200 pro-consumer groups – Americans for Financial Reform – strongly support it.

The House bill will put an end to the unchecked greed and recklessness that has wreaked havoc in our economy and brought hardship to so many hardworking Americans. In particular, the Consumer Financial Protection Agency is critical to fill the regulatory hole that allowed unsafe financial products to put our economy at risk.

But in spite of the strong support for the new watchdog agency, the financial industry had little trouble finding someone in Congress to help kill it.

An amendment by Walter Minnick (D.-Idaho) would strike the Consumer Financial Protection Agency (CFPA) from the bill altogether. And just how much money has this Wall Street Democrat taken from the financial industry? According to our recent report, Minnick has taken more than $170,453 in this year alone from the very banks and firms he is supposed to oversee as a member of the Financial Services Committee.

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Crucial element missing from credit card reform

Credit card reform is in the offing, but there’s still one crucial element missing: Consumers still may have to give up their right to go to court whenever they get a new credit card.

Free Speech Radio News did a great piece on this. Reporter Leigh Ann Caldwell explains how mandatory arbitration clauses — which require customers to give up their right to go to court in the event of a dispute — are ubiquitous, especially in credit card contracts. 

While some companies, like Bank of America, have decided to stop using mandatory arbitration clauses, that doesn’t fix the problem. In fact, we think companies are just trying to stave off legislation. You can hear her radio piece here.

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Who is going to bail out Main Street?

Want another reason why most Americans have no sympathy for the Wall Street investment firms and financial institutions? Check out this CNN interview with two former credit card bankers who talk about how their job was to make consumers max out their credit lines, with little regard whether the customers could afford it (via Consumerist).

“Every customer who calls in is a mark. It’s a great big con,” said Colombo, who estimates that she alone sold almost a quarter of a billion dollars in the four years she worked for MBNA before it was bought in 2005 by Bank of America.”

Sarah Byrnes writes more on this issue at Caveat Emptor, including links to some video-taped interviews a couple of the ex-credit card company employees gave to Americans for Fairness in Lending.

So, the question remains, what about all those Americans struggling under almost a trillion dollars in credit card debt, is Congress going to do anything for them? Will they listen to the suggestion of Public Citizen and other consumer groups who want some sort of cap on credit card interest rates? Don’t forget to sign our petition asking Congress to put consumer interests first.

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Nothing fair about mandatory arbitration

Check out this report on ABC News about the unfairness of the private arbitration system forced on consumers by credit card companies and other businesses. I’ve posted about mandatory binding arbitration but this report has an unbelievable example of how stacked the system is against consumers. These binding arbitration clauses are included in the fine print of agreements for credit cards, cell phones, financial services, gym memberships and much more. By forcing consumers to accept arbitration, companies take away a consumer’s right to have grievances heard by a judge or jury. Instead, cases go before a private arbitrator who is hired by the business and who almost always rules against the consumer.

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U. S. Chamber of Commerce Attacks Arbitration Fairness Act, Surprised?

From Barry Boughton @ Watchdog Blog: The U.S. Chamber’s Institute for Legal Reform (ILR) yesterday launched a campaign to scuttle important consumer legislation pending in Congress. The attack is aimed at the Arbitration Fairness Act (S. 1782/H.R. 3010) which is designed to protect consumers, employees and others from having binding arbitration imposed as the only means by which their disputes may be resolved. For those of you who don’t know, the current problem with arbitration is its growing use by business to provide an edge in resolving disputes with their customers – and it’s appearing everywhere. If you have a cell phone, credit card, bank account, auto loan, brokerage account, or a number of other goods services, chances are you’ve signed away your right to sue if things go wrong, without even knowing it!

This recent attack by the Chamber is in response to Public Citizen’s detailed report issued last fall which found that arbitrators employed by the National Arbitration Forum ruled against consumers in 94.7 percent of the 19,000 cases involving credit card holders. Continue Reading >>

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