The Consumer Finance Protection Bureau: America's Best Hope for Real Financial Reform

(NNPA) - As the U. S. Senate prepares for a pivotal vote on America's financial future, the emerging scenario is reminiscent of the biblical story of David and Goliath, where a young lad's slingshot felled an enormous giant. A critical U.S. Senate floor vote on financial reform known as Restoring American Financial Stability Act of 2010 is expected to be one of the first votes taken after lawmakers return from the current spring recess. For millions of Americans, its passage could be the slingshot that aims at correcting the neglectful oversight and abusive financial practices that together have created the current crisis.
When average citizens wonder why Capitol Hill does not seem to understand the plight of families struggling with record high unemployment, more foreclosures, and a steep rise in personal bankruptcies, a review of the funds being spread over our nation's seat of government begin to explain why things are happening as they are.
According to the Center for Responsive Politics, the $3.9 billion that financial interests have spent to influence Washington policy over the last decade represents more lobbying money than from any other industry. In 2009 alone, $465 million spent by the financial industry on lobbying Washington, translates into expenditures of $1.4 million a day and includes 1,726 registered federal lobbyists paid to woo 100 U.S. Senators and 455 Members of Congress.
Moreover, many former members of Congress and their former staffs are now employed by the financial services industry. Included among these prominent former elected leaders are Dennis Hastert, former Speaker of the House of Representatives; Trent Lott, former Senate Majority Leader; Dick Gephardt and Dick Armey, both former House Majority Leaders.
The tremendous investment meant to preserve the financial status quo and block changes that could prevent another financial crisis are not intended to serve the public's interests; but rather to preserve and increase the industry's considerable profits.
According to the Center for Responsible Lending's most recent research:
Since 2007, 6.6 million foreclosures have been initiated nationwide; without financial reform, the number of foreclosures will total as many as 12 million over the next five years;
In 2009, families living near foreclosures lost $502 billion in property values;
Each year, payday loans strip nearly $ 3.5 billion from working families in fees for churned loans; and
While at least two nationally-chartered banks have begun offering payday loans, their regulator, the Office of the Controller of the Currency (OCC) has condoned that development which brings triple-digit interest rates.
Late last year, the House of Representatives passed its own version of financial reform. Since that time, Senate action has been delayed for months by the lack of bi-partisan support in the Senate Banking Committee of a version offered by its chair, Sen. Chris Dodd. However just before the spring recess, the Senate version passed out of committee on a party-line vote.
Fortunately for consumers, one member of Congress has offered firm and public support for real financial reform. In a recent guest column for The Hill, a widely-read publication for Washington insiders, Congresswoman Maxine Waters (D-CA), wrote in part, "The greed and excess displayed on Wall Street for too long will only be reined in with effective government regulation."
Continuing she added, "Currently at least seven federal agencies share oversight of the financial system, but consumer protection is not the priority for any of them, and we have seen the results of their neglect: consumers have been taken advantage of and led to financial ruin."
Now while Senators are back home working in their district offices and meeting with constituents, it is a timely opportunity to strongly urge their respective support of the proposed Consumer Finance Protection Bureau (CFPB) with no weakening amendments to diminish the bureau's effectiveness.
The proposed CFPB would provide for the first time in our nation's history a single agency whose sole mission is to protect the financial interests of consumers. From mortgages, to credit cards, auto and payday lending, the current maze of bureaucracy would be streamlined into a single office. CFPB would also function independently and be empowered with the authority to write and enforce rules.
An abundance of phone calls, visits, letters and e-mail to Senators could mean the difference between pro-consumer reform or more of the well-heeled influence of Washington lobbyists and corporate interests.
Financial reform and the CFPB are the weapon – the slingshot, if you will – that we need to slay abusive and predatory financial practices. Our collective voices are the vehicle that can help it reach the mark.
Charlene Crowell is the Center for Responsible Lending's Communications Manager for State Policy and Outreach. She can be reached at Charlene.crowell@responsiblelending.org.