The National Scene - Wednesday, July 1, 2009 13:09 - 0 Comments

President Obama calls for new consumer protections

President Barack Obama is running into strong opposition from hard-line defenders of a financial system that has exploited consumers for years. The president is pushing for a law this year which would impose and enforce new rules for the nation’s embattled financial system. The goal is to prevent a repeat of the breakdown that sent the U.S. economy reeling during the last months of the Bush Administration. There will be a tough fight in Congress. There is opposition from some leaders in the banking and insurance world who simply don’t want to be regulated. When you consider that the lack of regulation in the financial industry was the root cause of our nation’s economic woes, it’s hard to accept this opposition to regulation.

One important part of the president’s plan is the creation of a new consumer watchdog office that would protect people’s interests. Ordinary Americans who rely on credit cards, home loans and other financial instruments must be protected. The new Consumer Financial Protection Agency would specifically take over oversight of mortgages, requiring that lenders give customers the option of “plain vanilla” plans with straightforward and affordable terms, among other changes.

The new agency would have the power to set tough new rules so that companies compete by offering innovative products that consumers actually want and actually understand. President Obama’s changes would begin to reverse the easing on federal regulations that actually came about starting in the 1980s. Democratic leaders in Congress are promising legislation will get passed this year, but that depends in part on how key questions are addressed on Capitol Hill, including the role of the Federal Reserve. Hopefully, the president’s proposal will pass without significant change.

Source: Associated Press