Financial Reform and Consumer Rights

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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. 

Today, our country has made great strides to rebound from that recession, but it is clear we still have more work to do. I continue to comb through views from across the political spectrum, questioning economists, and hearing from the constituents I represent, in order 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. This law established the Consumer Financial Protection Bureau (CFPB) to monitor the health of the entire financial system and connect warning signs across markets before it’s too late.  The CFPB is dedicated to standing up for the well-being of financial consumers, and has the ability to disband too-big-to-fail banks on the verge of collapse before they can wipe out the rest of the system.

 

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HOLDING THOSE RESPONSIBLE ACCOUNTABLE

Once the immediacy of the crash was behind us, I began focusing on ways to uncover fraud and predatory conduct and hold accountable those individuals and firms who were responsible.  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 those responsible 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. Most recently, news came 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.

 

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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.  I 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 amendment 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.

Consumers, as American voters, have a right to know that organizations which receive federal funds are not turning around and using those funds to support political campaigns.  My bill, the No Taxpayer Money for Corporate Campaigns Act, would bar any company or organization from using federal funding to support a campaign, voter registration drive, or similar political activity.  The Supreme Court’s Citizen United case cleared the way for unlimited corporate funds to be used for political purposed.  My bill takes a step forward towards limiting the harmful consequences of the Court’s decision.  I am also a cosponsor of a proposed amendment to the Constitution to clarify that corporations do not have the same Constitutional rights as people.

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