CAF to Sen. Dodd: Call for Vote on Independent Consumer Financial Protection Agency

Senate
Democratic leaders should conduct an up or down vote on the creation of
an independent Consumer Financial Protection Agency on the Senate
floor, the co-directors of the Campaign for America's Future said
Friday.

Robert Borosage and Roger Hickey are
responding to reports that Republican Sen. Corker, R-Tenn., and other
Republican members of the Senate Banking Committee are refusing to
support the watered down legislation they demanded as a price for their
support. Despite this abandonment of bi-partisanship by the
Republicans, press reports indicate the chairman of the Senate Banking
Committee, Sen. Christopher Dodd, D-Conn., may introduce a financial
reform bill that does not contain an independent agency devoted to
defending consumer interests in the financial marketplace. Instead,
under one idea floated in press reports, consumer protection would be
housed in a unit of the Federal Reserve and would be subsidiary to the
Fed's traditional sole emphasis on banking institution soundness. This
neutered version of the legislation was crafted by Dodd in an effort to
win Republican votes, and now that Republicans are refusing to support
it, the CAF co-directors are telling Dodd not to proceed with a
weakened bill.

"It is both bad policy and bad
politics," said Borosage and Hickey. "These deals would leave the
American consumer poorly protected and the risk of another catastrophe
unacceptably high. And these important policies are being traded away
in the Senate in the name of a bipartisanship that never appears.

"Instead of bargaining away a
consumer financial protection agency away in a backroom deal, Dodd and
Senate leaders should bring the agency to the floor. Dodd should defend
the agency, as he has in the past. Then let each member of the Senate
decide whether they will stand with consumers or stand with Wall
Street."

The full statement of Borosage and Hickey follows:

A major cause of the financial
collapse was the failure of financial regulators to intervene when
lenders began peddling "liar's loans" and other fraudulent or deceptive
mortgage products, and millions of families have been harmed as banks
gouged their customers with fees and usurious interest rates while
regulators looked the other way. This has to stop, and it will not stop
without a dramatic change in how Wall Street is regulated.

Weak consumer protection
authority in an agency with a tradition of giving ordinary consumers
short shrift will not work. We need an independent consumer financial
protection agency that acts as a watchdog on behalf of the millions of
people who use credit cards, take out a mortgage or car loan, or get
financing for their small business. Legislation that the House has
already passed would create such an agency and would bring a
long-overdue balance between the wants of Wall Street and the needs of
ordinary people.

Poll after poll indicates that a
majority of Americans support the creation of a consumer financial
protection agency. Yet a minority in the Senate is taking its cues
from the same Wall Street lobbyists who pushed for the policies that
brought us to the brink of financial ruin. To appease that minority,
Senate Banking Committee Chairman Christopher Dodd, D-Conn., has
indicated his willingness to scuttle this critical component of
financial reform. It is both bad policy and bad politics. These deals
would leave the American consumer poorly protected and the risk of
another catastrophe unacceptably high. And these important policies are
being traded away in the Senate in the name of a bipartisanship that
never appears. Instead of bargaining away a consumer financial
protection agency away in a backroom deal, Dodd and Senate leaders
should bring the agency to the floor. Dodd should defend the agency, as
he has in the past. Then let each member of the Senate decide whether
they will stand with consumers or stand with Wall Street.