Financial Reform and Consumer Rights

• Click below for more info on:
•  
• Accountability
• ~
• Consumer rights

 

 

 

 

 

 

 

---

OVERVIEW

In fall of 2008, newspapers around the world and in our community were reporting on a financial system on the verge of collapse with headlines that read “Panic Engulfs Markets”, “Stocks Plunge as Crisis Intensifies” and “Is It 1929 Again?”  Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, and economists from across the political spectrum were warning that unless the federal government took bold action, we faced another potential Great Depression. 

During that time and in the years since, I have spent hours combing through views from across the political spectrum, questioning economists, and hearing from the constituents I represent, always shaped by my desire to make the economy work for all Americans, not just those on Wall Street.  In 2010, I was proud to vote for the Wall Street Reform and Consumer Protection Act, now law, to address the causes of the crash and put in place steps to prevent another crash from happening again in the future.  The law authorizes a single regulatory entity to monitor the health of the entire system and connect warning signs across markets before it’s too late, creates an agency dedicated to standing up for the well-being of financial consumers, and gives regulators the ability to disband too-big-to-fail banks on the verge of collapse before they can wipe out the rest of the system.  The new law also includes several of my provisions that I offered as amendments on the House floor.

---

HOLDING THOSE RESPONSIBLE ACCOUNTABLE

Once the immediacy of the crash was behind us, I began focusing on ways to hold accountable those individuals and firms who were responsible in order to ensure that where fraud and predatory conduct existed it was uncovered and punished.  In testimony before Congress, the FBI has stated that fraud and financial predation on vulnerable populations, including senior citizens, played a major role in the bubble that led to the crisis.  The charges of fraud filed by the SEC against Goldman Sachs—for lying to pension funds and other investors about the investments they were selling—offer a small glimpse into the large-scale fraud believed by the FBI to have occurred.  That is why I cosponsored the Financial Crisis of 2008 Criminal Investigation and Prosecution Act.  It’s also why I called for a criminal investigation into Goldman Sachs and others to send a strong signal that financial fraud should not be swept under the rug and that the guilty should be held accountable. 

Although a number of cases have been brought by federal agencies, the terms of many these settlements were never or only belatedly made public, preventing the public from holding the regulators accountable for possible too-lenient treatment of bad financial players.  That is why I am a strong supporter of the Truth in Settlements Act, which would set forth new requirements for the public disclosure of any covered settlement agreement entered into by a federal executive agency. Many agencies are able to deem the settlements confidential and include tax deductions and other benefits in the agreements that undermine the settlement. This legislation would demand transparency and specificity.  Most recently, news has come to light that the New York Federal Reserve, the regulator charged with overseeing Goldman Sachs, has grown too close to the Wall Street firms it is supposed to be policing.  I have joined several of my colleagues in Congress in calling for additional congressional oversight.

---

STANDING UP FOR CONSUMER RIGHTS

After years of lax oversight, economists and regulators are recognizing that protecting consumers’ financial rights is critical to preventing another economic crisis.  I was an early supporter of legislation, now law, to end some of the worst abuses by credit card companies.  (To find out what the law means to you, please see: Facts You Should Know About the Credit CARD Act)

I have also led the effort for several important pro-consumer policies.  After hearing from a small business owner unable to access his own deposited funds in time, I introduced the Faster Access and Shorter Transaction Time for Checks Act (the“FASTT Checks Act”) to guarantee that consumers can access their deposited funds sooner.  Unnecessarily long wait times for deposited funds act as little more than a zero-interest loan from consumers to their banks.  This effort was endorsed by the National Small Business Association for its ability to help small business ownersaccess their funds faster.  I also authored an amendment—passed as part of financial reform—that helps increase the ability of consumers to access their credit scores after I heard from constituents who were impacted by Experian’s decision to deny them access to their own FICO credit score.  My amendment led directly to a study by the Consumer Financial Protection Bureau which found that one-fifth of consumers who try to access their own credit scores from the credit bureaus get back scores that are significantly different from the scores that lenders receive about them.  That is why my ongoing work places consumers and lenders on a more level playing field, ensuring that the people of the Massachusetts 3^rd district have the tools they need to build and maintain good credit.

Likewise, I have been an early and strong supporter of a strong, independent Consumer Financial Protection Bureau (CFPB) that can stand up for consumers.  Much like poisoned meat, contaminated pharmaceuticals, and toxic toys are no longer commonly found in the marketplace because there’s a consumer watchdog holding firms accountable, a similar watchdog is needed for predatory lending, hidden fees, and skyrocketing rates.