Wall Street Reform and Consumer Protection

"The message is clear: We no longer will tolerate the kind of greedy, anything-goes attitude that led to the loss of 8 million jobs and brought our economy to the brink of collapse."

Protecting our financial system is essential to preserving our American dream of owning a home and taking care of our families. That is why I voted for the Wall Street Reform and Consumer Protection Act (H.R. 4173), legislation that will prevent Wall Street from gambling with our money. The president signed this legislation into law on July 21, 2010.

What the Wall Street Reform and Consumer Protection Act will do:

• Creates a new agency to protect families and small businesses by ensuring that bank loans, mortgages and credit cards are fair, affordable, understandable and transparent. Bars the financial industry from offering mortgage loans to people who can’t afford to repay them.


• Ends abusive predatory lending practices that occurred during the subprime lending frenzy.


• Shuts down “too big to fail” financial firms before risky and irresponsible behavior threatens to bring down the entire economy.


• Ends costly taxpayer bailouts with new procedures to unwind failing companies that pose the greatest risk – paid for by the financial industry and not the taxpayers. Eliminates the Troubled Asset Relief Program.


• Creates tough new rules on the riskiest financial practices that gambled with your money and caused the financial crash, such as the credit default swaps that devastated AIG, and common sense regulation of derivatives and other complex financial products.  Includes a strong “Volcker rule” that generally restricts large financial firms with commercial banking operations from trading in speculative investments.


• Tough enforcement and oversight with:

More enforcement power and funding for the Securities and Exchange Commission, including requiring registration of hedge funds and private equity funds.

Enhanced oversight and tranparency for credit-rating agencies, whose seal of approval gave way to excessively risky practices that led to a financial collapse.

• Reins in egregious executive compensation and retirement plans by allowing a “say on pay” for shareholders, requiring independent directors on compensation committees and limiting bank executive risky pay practices that jeopardize banks’ safety and soundness.


• Creates new protections for grocers, retailers and other small businesses facing out-of-control swipe fees that banks and other credit and debit card issuers charge these businesses for debit or prepaid-card purchases. Merchants stand to save billions of dollars.


• Audits the Federal Reserve's emergency lending programs from the financial crisis and limits the Fed's emergency lending authority.

If you need assistance with a financial institution, my office is here to help. Send me an email or call (520) 881-3588 to speak with a caseworker in my office.

Predatory Lending Sunset Act

On July 1, Arizona became the sixteenth state to have effectively outlawed triple-digit payday loans, with comprehensive interest rate caps at or about 36%. To build on our successes in Arizona, I introduced the Predatory Lending Sunset Act, a bill that guarantees consumers nationwide benefit from the same protections that Arizonans have demanded.  The bill will mirror the new Arizona standards by establishing a national 36% usury rate on payday loans and banning the use of a check or access to a borrower’s bank account as a security obligation for the loan.  The Predatory Lending Sunset Act also strengthens protections in Arizona and nationwide by banning the use of other predatory products and closing new loopholes before lenders find them.

>>READ MORE

Credit Cardholders’ Bill of Rights

In 2009, Congress passed and President Obama signed into law the Credit Cardholders’ Bill of Rights (Credit CARD Act) LINK TO MONDAY RELEASE (not currently on website), to protect consumers and crack down on the abusive practices of the credit card industry — such as excessive fees, unfair interest rate hikes, and arbitrary agreements.  On August 22, the last of the new credit card protections take effect – including the banning of unfair rate increases, abusive fees, and penalties and requiring credit card companies to reconsider the interest rate hikes they jammed in place before the new law took effect.

With new requirements to provide consumers with clear and plain-English disclosures, the Credit Cardholders’ Bill of Rights will save some families thousands of dollars.  Consumers will know their rights and be able to make informed decisions about their household finances.  This legislation will ban unfair rate increases and forbid abusive fees and penalties.  Among a raft of new protections, the new law:

• prohibits retroactive interest rate hikes on existing balances,
• bans double-cycle billing (charging interest twice for balances paid on time),  
• eliminates due-date gimmicks,
• requires 45-days’ advance notice of interest rate, fees, and finance charges hikes,
• requires payments to be applied fairly to the highest interest rate balance first, and
• strengthens credit card protections for young people.

These new credit card restrictions, along with overdraft limits recently instituted by the Federal Reserve, will save U.S. consumers at least $5 billion in fees this year alone at the largest U.S. retail banks and credit card companies. [USA Today, 5/17/10]

A new report finds that "While it's been less than a year since passage of the Credit CARD Act, the new law appears to be working for millions of Americans who have credit cards. The elimination of most of the 'unfair' or 'deceptive' practices of the credit industry since we last surveyed the marketplace marks a major milestone in the move to make credit cards safer, transparent and more fair for consumers." [Pew Charitable Trust]

Related Links:

Top Ten Things You Don't Know About Wall Street Reform

U.S. REP. GABRIELLE GIFFORDS’ STATEMENT ON HISTORIC FINANCIAL REFORMS

U.S. REP. GABRIELLE GIFFORDS ACTS TO BAN PAYDAY LENDING NATIONWIDE

U.S. REP. GABRIELLE GIFFORDS SUPPORTS FINANCIAL REFORM LEGISLATION