Monday, March 15, 2010
But More Needs to Be Done to Protect Consumers
WASHINGTON, D.C. — In response to a proposed package of financial industry reforms announced by Senator Chris Dodd today, Consumers Union, the non-profit publisher of Consumer Reports, said the legislation contains some important reforms, but said more needs to done to better protect consumers.
Gail Hillebrand, Director of Consumers Union’s Defend Your Dollars campaign (www.DefendYourDollars.org), said “It is encouraging that Senator Dodd’s financial reform package includes a new government watchdog to protect consumers from unfair financial practices that can undermine family wallets and our economy. But we are concerned that this bill gives veto power over new consumer protections to another group of banking regulators and relies too heavily on these same regulators to enforce new safeguards. We need a government watchdog with real authority to protect consumers. Lawmakers should strengthen the Dodd proposal by making sure that the banking regulators who failed to prevent our current financial crisis can’t stand in the way of needed consumer protection.”
Pamela Banks, Senior Policy Counsel for Consumers Union, said “In the face of fierce opposition by bankers, Senator Dodd has come forward with some significant reforms but we need to redouble our efforts to secure more improvements for consumers.”
Under the proposal unveiled by Senator Dodd, the new government watchdog will be housed in the Federal Reserve with independent funding and a director appointed by the President. The new watchdog will have rulemaking authority for banks and non-banks that engage in lending and other financial services, such as payday lenders, and rent-to-own stores. However, a council of systemic regulators will have some authority to veto rules if it finds that the rules pose a systemic risk to the financial system. Like the financial reform legislation passed already in the House, the Dodd proposal gives state attorneys general the power to enforce the rules, and recognizes the value of state laws in promoting consumer protections.
David Butler: 202-462-6262 or Michael McCauley: 415-431-6747