Pat Waak: Wall Street reform protects consumers

Sunday, July 25, 2010

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This week, President Barack Obama signed a landmark law that affects the lives of every Coloradan: Wall Street reform. For some reason, the media only has given passing attention to this historic legislation. It seems that with other more sensational events competing for space, we did not get the full force of what this action will mean for us.

So what is in the bill? The Wall Street Reform bill includes the most stringent financial reforms passed since the Great Depression. It will make the big banks of Wall Street more accountable. And it will provide more economic security for families and businesses on the main street of Steamboat Springs and that of every other town and city in Colorado.

The bill includes the strongest consumer financial protections ever, and it creates an independent agency with the principle job of enforcing those protections and standing up for American consumers. That means that there will be one agency whose sole job is to make sure that Coloradans and all Americans get the protections they deserve. The agency also will set clear rules to hold banks, mortgage companies, payday lenders and credit card lenders accountable. It also reins in Wall Street abuses and requires accountability and responsibility from the financial sector. It therefore provides all Americans with a new level of certainty that taxpayers never again have to bail out the banks.

We Coloradans know how it feels when a credit card company suddenly hikes up our annual percentage rate or adds some fee we don’t understand. Wall Street Reform will give stronger protections for consumers against unfair credit card practices and offer free annual credit scores so we can stay on top of our finances.

Part of what got us into this financial mess was unscrupulous mortgage brokers who sought higher commissions by selling houses to families who simply couldn’t afford the high mortgage payments and didn’t understand the terms of their contracts. Under the bill, mortgage brokers will be prohibited from selling mortgages they know their clients can’t afford. Further, brokers who offer investment advice will have to act in the best interest of their customers and not their own financial interests.

Have you ever purchased something with your debit card thinking there were plenty of funds in your account to cover it, only to find out later that you overdrew from your account by a few dollars? Then your bank charged you $25 or more for that overdraft? Banks simply will not be allowed to do that anymore. There will be clearer rules about overdraft fees. In turn, businesses won’t be permitted to charge extra fees for debit card swipes that exceed the cost of processing the transactions.

Reform closes big bank loopholes and regulatory gaps — all the perks big banks took advantage of to get us into this mess in the first place. And the big banks and financial companies won’t be allowed to get so large that if one fails, it will create a tidal wave that puts our entire financial system at risk. Shareholders will have greater input about how much CEOs get paid. And best of all, there will be no more taxpayer-funded bailouts. If a company is going bankrupt, it will have to close.

The bottom line is that reform is about growing our economy in an efficient way and not letting greed take advantage of our communities.

Those who liked business as usual will complain about government getting in the way of the market. Well, “business as usual” stood in the way of financial stability for individuals and the country. “Business as usual” gambled away our dollars without any accountability.

Wall Street reform makes big business accountable, just like we try to be with our own checkbooks and the families we support. It is about time big business abides by the same standards.

Pat Waak is the chairwoman of the Colorado Democratic Party.

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seeuski 2 years, 10 months ago

Is this one of the local Democrats who wrote the letters praising our Colorado Congressmen for voting in the new Health Care takeover? The same people who told everyone how great it was that costs would go down and everyone would be covered and it would reduce the deficit? And now we get this nonsense about the FinReg bill. Not one mention of the big culprits behind the worldwide economic meltdown, Fannie/Freddie, which is a Democrat run scheme on the highest order of the "spread the wealth" socialism programs. As a former Loan Officer for over a decade I worked out of a Tysons Corner VA Lenders office and we had the Fannie Mae reps at our sales meetings constantly pushing the no-doc, no money down, and bad credit programs along with the FHA relaxed guideline loans. They used words like emerging markets to describe some of these scams. We new that many of these folks we would be originating loans for would struggle as they were increasing there monthly housing costs by sometimes double what their rent was, but we had to lend to these people or we could be charged with redlining and discrimination. And now we see the SEIU thugs protesting at Bankers houses and storming office meetings to intimidate people to succumb to the demands of forgiving the loans of those that have defaulted. When I read a stupid letter by a woman representing a political group who is mostly responsible for the current economic mess that blames the Loan Originators and not the Mortgage Backers Fannie/Freddie and Congress who oversees those Institutions I get mighty teed off. This new Government takeover with the over 2,000 pages of gobblety goop is another Progressive power grab, why else would it create 20 new affirmative action offices designed to force businesses to discriminate in their hiring practices? More Social Justice/Socialism. Just like the SEC failed to act on a whistle-blowers warnings about Bernie Madoff so too will the Government destroy even further a once thriving economy in the name of less greed. How phony. And how ironic that the FinReg bill was created in the names of Barney Frank and Chris Countrywide Dodd.

seeuski 2 years, 10 months ago

'On June 25, 2010, President Barack Obama posted to his Twitter Account, “Last night’s House-Senate agreement on Wall Street reform represents the toughest financial reform since the Great Depression.”

"This was perhaps the most misleading statement that Obama has made in his political career." "However, the Dodd-Frank “Wall Street Reform and Consumer Protection Act”, published as H.R.4173 (Dodd-Frank Conference Report), as of June 27, 2010, not only ignored mention of Fannie Mae and Freddie Mac, the two government agencies that were the principal drivers of sub-prime mortgages, but introduced in Title XII, “IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS”, a new, fraud-prone solution to a non-existent problem, the granting of $2,500 loans to middle and low income borrowers."

"Allows certain ‘eligible entities’ to receive such grants. (Organizations of the type of ACORN would seem to be eligible, if they know how to apply and have the right connections.);"

http://www.capital-flow-watch.net/2010/06/27/dodd-frank-spurs-sub-prime-loans/