Proposed Consumer Agency Will Protect Against Another Economic Collapse

In testimony before the House
Financial Services Committee on Thursday, U.S. Public Interest Research Group praised
the centerpiece of the Obama administration's plans to reform the
financial regulatory system.

Speaking
to a packed hearing, U.S.
PIRG's Consumer Program Director, Ed Mierzwinski, said he strongly endorses
the proposed Consumer Financial Protection Agency.

"Bankers
and their armies of lobbyists are opposing the new consumer agency and
defending the status quo," noted Mierzwinski, who has been advocating on
the behalf of consumers for three decades.

"But
the real reason that the economy collapsed is because no agency was responsible
for protecting consumers so companies sold them risky products," he
added.

U.S.
PIRG strongly supports the proposed agency in part because of its underlying
principles of "independence, its recognition that federal law should
always serve as a floor of protection and not a ceiling, and its shared
enforcement with states" in shielding consumers from predatory lending
and other fraudulent practices by financial businesses, Mierzwinski said in his
testimony.

The
other pro-consumer proposals by the Obama administration include new investor
protections and limits on executive compensation policies. "But if the
administration wants to give the Federal Reserve increased responsibilities as
a systemic risk regulator it must democratize it first." Mierzwinski had
a number of other suggestions to improve other parts of parts of the Obama plan
as well.

The
creation of the Consumer Financial Protection Agency and the other reforms
"are necessary to reform our collapsed financial system and inoculate it
against further catastrophic events," Mierzwinski added.

To
download Mierzwinski's complete testimony, click here.