Senate Must Create Strong and Independent Consumer Financial Reform Agency

Americans for Financial Reform (AFR), a broad coalition of civil rights and consumer advocates that includes The Leadership Conference, is calling a new proposal to create a Consumer Financial Protection Agency too weak to adequately protect Americans from abusive lending practices like the ones that led to the current recession.

“The revised proposal does not provide what is needed to protect American families or the financial system as a whole: a strong, independent Consumer Financial Protection Agency with the power to set and enforce fair rules for all types of credit,” said Heather Booth, AFR executive director.

The House of Representatives passed a financial reform bill in December that would create an independent agency. The revised proposal by Sen. Christopher Dodd, D. CT, is an attempt to get bipartisan support for a financial reform bill in the Senate. 

However, AFR says that under this proposal, the consumer agency would not be a separate, independent agency and would have less power to enforce regulations designed to protect consumers from abusive lending and consumer practices.

“Abusive lending made possible by inadequate consumer protections was a major cause of the financial crisis, and we cannot allow the status quo to continue,” said Nancy Zirkin, executive vice president of The Leadership Conference. “Big banks and abusive lenders fought responsible regulation before the crisis, and we are all paying the price. It is unacceptable for Congress to allow them to succeed again.”

Currently, there are more than seven federal agencies tasked with oversight of financial services institutions, yet not one of them enforced laws to protect consumers and eliminate discrimination in lending practices that led to the mortgage and financial meltdowns and the recession.

For more information about what you can do, visit our Action Center.