September 14, 2009
Agency One Year After Lehman Brothers Collapse
WASHINGTON, D.C. – On the eve of the one-year anniversary of the collapse of Lehman Brothers, Consumers Union urged Congress to move forward with proposals to establish a Consumer Financial Protection Agency (CFPA) as part of a broader effort to toughen regulatory oversight of the financial industry. The House Financial Services Committee is expected to vote on the CFPA in the coming weeks.
The Lehman Brothers bankruptcy last September triggered a free fall on Wall Street and worldwide economic crisis. The complex financial instruments that led to the downfall of Lehman Brothers and undermined the stability of the nation’s banks were based on risky home loans that were poorly underwritten and unsuitable for borrowers.
“The crisis on Wall Street started with a failure to protect consumers,” said Gail Hillebrand, Consumers Union’s Financial Services Campaign Manager. “We need to fix the products, practices, and incentives in the financial system that undermine family finances and the economy. That’s why Congress should create a Consumer Financial Protection Agency whose sole job is to look out for consumers and make sure they are safeguarded from unsafe and deceptive financial products and services.”
The proposed Consumer Financial Protection Agency would ensure that credit, deposit and payment products and services are being offered in a fair, sustainable and transparent manner.
The CFPA would create baseline federal consumer protection standards that apply regardless of the nature of the provider and states would remain free to set higher standards.
More information about the CFPA can be found at: Issues