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David vs. Goliath: The Fight Begins for Reform of the Financial Industry |
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Most Americans want strong regulation of our nation’s financial markets, according to a poll released today by Americans for Financial Reform (AFR), a coalition of nearly 200 investors and civil rights and community organizations.
The poll, conducted by Lake Research Partners, surveyed 900 likely voters in 77 “Blue Dog” or conservative Democratic districts and those in politically competitive Democratic districts.
More than two-thirds of voters in all the districts support creating the Consumer Financial Protection Agency (CFPA) to “create and enforce a strong set of rules to require fair, affordable, understandable and transparent financial products like bank loans, mortgages and credit cards for families and small businesses.”
When asked if there was too much, too little or just the right amount of regulation of banks, the stock market and credit card companies, voters agreed, by a 23-point margin, there’s too little rather than too much regulation.
With the House Financial Services Committee taking up legislation this week on reforming the nation’s financial markets, AFR, along with the AFL-CIO, SEIU and other groups, is organizing rallies around the country in support of financial reform.
The coalition is preparing for a “Showdown in Chicago” Oct. 24-27 at a meeting of the American Bankers Association, where AFL-CIO President Richard Trumka will join more than 5,000 people in calling for financial reform and demanding that banks be accountable for the billions of dollars of taxpayer money they received to bail them out of the crisis they created.
A key part of such financial reform should be a consumer watchdog agency—the CFPA—similar to the Food and Drug Administration and the Consumer Product Safety Commission that would set basic standards for financial transactions.
During an AFR conference call yesterday, Elizabeth Warren, a Harvard professor and chairwoman of the Congressional Oversight Panel (COP), said such an agency is crucial. Warren was one of the original proponents of the CFPA and is featured in Michael Moore’s movie, Capitalism: A Love Story. She made it clear she was speaking for herself and not the COP.
Safety works. People are getting cheated and we can fix that. Regulations keep us safer. Does anyone want to go back to a world where we don’t have robust regulatory agencies. Think of how many people are alive today because we have basic safety regulations on drugs.
More importantly, those regulations have made it worthwhile for companies to invest in good products and good testing
She pointed out that large financial institutions have been writing the financial regulations for the past 15 years. When their risky actions created the current financial crisis, they turned to the taxpayers for a bailout. Then they turned around and used part of the bailout money to fight so they can continue activities that got us in this mess and would bring us right back to this point again.
The fight that’s going on here around CFPA is about the survival of working families and middle-class families. I think it is fundamentally about where our economy goes.
Dave Johnson, writing on the Campaign for America’s Future website, puts it this way:
In the last several years we have all been fleeced, looted, robbed, swindled, thieved, tricked, cheated, scammed, exploited, ponzied, stung, conned, extorted, ripped off and bankrupted by the banks and other big financial companies. Finally the Congress is working on reining them in.
Ed Mierzwinski, director of the consumer program for U.S. PIRG, estimated that banks, the Chamber of Commerce and other financial groups are spending at least $148 million to lobby Congress over new laws. U.S. PIRG is a federation of state Public Interest Research Groups (PIRGs) and Mierzwinski was among participants in the AFR conference call.
We are up against a massive, unbelievably well-funded lobby trying to protect the status quo. They’re trying to protect the system that failed.
Says Heather Booth, director of AFR:
This is a true David and Goliath fight, but we know how that fight turned out. This is a fight about the big banks against the people.
Robert Borosage, co-director of the Campaign for America’s Future, on the group’s website, says Congress should beware of making deals with the banking industry.
Legislators would be well advised to understand the cozy old ways of doing business are no longer acceptable. Americans are livid and paying attention. Legislators who rely on Wall Street to finance their campaigns and then lead the effort to block or dilute reforms will discover that their constituents know what they have been up to.
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It is definitely time to disrupt the status quo with either meaningful state or federal credit card regulation, specifically interchange fee regulation.
The average interchange fee in the U.S. is seven times the interchange fee set by Visa and MasterCard in countries throughout the rest of the world. Using 2008 figures, if the interchange fee charged by credit card issuers was decreased (via comprehensive credit card reform legislation) from the current 2.10% to 0.60%, the result would be an annual savings of approximately $34.3 billion for U.S. merchants and consumers. Credit card issuers could retain 0.3% as a processing fee, the remaining 0.3% could be a “tax” used to fund a Natural Disaster Trust Fund (NDTF). In 2008, this would have generated $6.86 billion in funding for a NDTF.
The following article discusses how comprehensive, standardized, simplified, and transparent credit card reform legislation may fund a Natural Disaster Trust Fund.
http://www.csnews.com/csn/news/article_display.jsp?vnu_content_id=1004019107
The gangster capitalists, and their bribed and corrupt associates in both corporate owned major parties, are not about “change” or desire to reform anything. With “con-man” Obama and the Democrats in power, they are looting every aspect of the economy as quickly as possible tp maximize corporate profit and personal wealth.
Here is a socialist perspective on what must be done.
http://www.wsws.org/articles/2009/oct2009/pers-o15.shtml
A record year for Wall Street pay
15 October 2009
Barry Grey
According to the Wall Street Journal, the major US banks and financial firms are on track to hand out a record $140 billion in compensation this year. This is a 20 percent increase from 2008 and $10 billion more than the previous record, set in 2007.
The stock market celebrated the news, outlined in a front-page Journal article on Wednesday, along with the release of JPMorgan Chase’s third-quarter earnings report, which showed a seven-fold increase in profits from last year to $3.6 billion. The Dow Jones Industrial Average rose 145 points, closing above the 10,000 mark for the first time in a year.
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The American financial elite, aided and abetted by the White House and Congress, is profiting from an economic disaster that is driving hundreds of millions of working people in the US and around the world into poverty—a disaster precipitated by its own methods of financial speculation and fraud and its manic pursuit of personal gain.
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There is an element of provocation in the pay awards being doled out by the banks. Far from curbing their avarice, they are flaunting their wealth and power in the midst of soaring unemployment and deepening social misery for millions of Americans.
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The assault on workers’ pay reflects a deliberate policy of the Obama administration to use mass unemployment to drive down the wages and living standards of the working class and effect a further redistribution of wealth from the bottom to the top.
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The $140 billion in compensation reported by the Wall Street Journal for a section of the financial industry equals the total amount allocated in the administration’s stimulus plan for aid to the states.
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This colossal squandering of resources is rooted neither in psychology nor the “culture” of Wall Street, but rather in the capitalist system itself. The profit system subordinates all social needs to the accumulation of personal wealth by the narrow stratum that owns and controls the means of production, dominated by finance capital—the most parasitic and predatory section of the ruling elite.
The social disaster threatening the working class can be reversed only on the basis of a struggle for socialism, in which the productive forces created by the working class are taken out of private hands and developed under democratic control for the benefit of society as a whole.
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The working class must break the stranglehold of the financial aristocracy. The ill-gotten gains of the CEOs and financiers must be expropriated, without compensation, and these funds, which add up to trillions of dollars, used to meet the needs of working people for jobs, housing, education and health care, and to rebuild the crumbling social infrastructure.
The books and business dealings of the big banks must be opened to public scrutiny, with criminal investigations undertaken into their illegal practices.
This requires the building of a mass socialist movement directed against the Obama administration, the two-party system and the capitalist system which they defend.
Right.
It’s just a shame the lenders were given so long to begin complying with the new rules that were recently written. They’ve fallen all over themselves to raise their interest rates to obscene levels. In addition they’re lowering the credit limits on their GOOD customers for nonsensical reasons. I’ve even had one creditor out and out lie regarding their reasons and will be pursuing that one further!
The worst part of these somewhat unethical (at least IMO) business practices is the resulting negative impact on GOOD customers credit scores. Credit scores are not only looked at when you apply for credit. Potential employers also look at your credit reports and scores and a less than stellar report could result in denial of employment!
Do lenders need regulating? Oh yes, STRINGENT regulating! The upside to the higher interest, lower limits is I’m spending less. I’m no longer tempted to ‘whip out the plastic’ for that lovely little item I ‘think’ I really want but ‘know’ I don’t really need. LOL!