Posts Tagged ‘CFPA’

Elizabeth Warren Appointed Interim Head Of CFPA and More!

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President Obama has finally done something that makes sense! He’s given Elizabeth Warren the job as interim head to establish the agency. He has also made her a special advisor answerable only to him to set this up properly. What this means is that ole Timmy Geithner, the bankers’ best buddy, won’t have too much say over the agency or Ms. Warren’s stewardship.

I’ve been hoping for this, as so many other Americans have across the United States. Ms. Warren is a tireless consumer advocate with a pragmatic no-nonsense approach to finance. The banks don’t like her because she wants to close the loopholes in the laws that allow them to take advantage of those least able to cope with financial difficulties.

To be sure, Ms. Warren does not advocate reckless spending and living above one’s means. All she wants to do is bring back the concept of fairness to consumer finance.  She also understands that what has happened to most Americans in the last thirty years is not that we’ve spent our way crazy, buying big screen TVs and McMansions. She understands that the average middle class family has slowly been leveraged out of the American dream by the fixed expenses, those expenses which cannot be budgeted away.

She wants to do away with credit card and mortgage contracts that are hundreds of pages long. She wants consumers to be educated about what they’re signing when they get a credit card or a home loan. She wants them to understand and truly be able to compare between financial products and make educated decisions for themselves. Right now, there is no way they can do that, because really, who is going to read through pages and pages of a credit card contract that even the credit card company representatives can’t understand let alone explain?

So, hurray to Elizabeth Warren!

Tennessee Republican Now Against Financial Reform

 

monoploly The Republican senator from the state of Tennessee won’t support the current financial reform bill authored by Democratic senator Chris Dodd because he says it would give consumers too much protection.

His sticking point is the proposed Consumer Financial Protection Agency (CFPA) that has been proposed by financial experts like Elizabeth Warren. Even though there have already been compromises made on the agency, such as locating it within the Federal Reserve instead of it being a completely separate and independent entity, Senator Corker still believes it will have too much power.

He said of the agency :

You can have them making rules and enforcing things that undermine the safety and soundness, for instance, forcing an institution in the pursuit of social justice for instance – I’m just making up something – to make loans to people that have no ability to pay it back.

Obviously, the good Senator Corker is one of those who believe that consumers borrowing more than they could afford to pay back was the sole cause of the collapse. Conveniently, he leaves out Wall Street who created mortgage securitization in the first place in order to take advantage of extremely low interest rates. He neglects to mention the banks who rapaciously demanded more and more mortgages to sell to Wall Street, and the mortgage brokers that convinced families that they could afford $400, 000 dollar homes on meager salaries. The details are beyond the scope of this article, but let’s just say that the financial collapse wasn’t only due to people borrowing more money than they could afford to pay back.

The bottom line is that Republicans don’t want the CFPA at all. In fact, they would like nothing better than to stamp out all financial reform because the banking industry doesn’t like it. An agency that exists only to protect the American people from the predations of Wall Street and the big banks? No, that’s too much protection!

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