By Meagan Wiseley – University of New Mexico/Talk Radio News Service

Chairman of the House Financial Services Committee Barney Frank (D-Mass.) told reporters at a press conference Tuesday that debate and markup of the Investor Protection Act will begin Wednesday and markup of other systematic risk legislation will follow.

“We will start the markup…beginning tomorrow, and everyday that the House is in session until we finish,” Frank said.

Following the consideration of the Investor Protection Act of 2009, the committee will begin markups of the Federal Insurance Office Act of 2009, the Financial Stability Improvement Act of 2009 and the Overdraft Protection Act.

Frank added that he expects aspects of the larger financial regulatory reform legislation, including the creation of the Consumer Financial Protection Agency, to be voted on by December.

“The earliest we can get to the floor will be the first week in December,” Frank said.

By Meagan Wiseley – University of New Mexico/Talk Radio News Service

The Americans for Financial Reform said today they are urging the House Financial Services Committee to reject an amendment that will be proposed by Rep. John Campbell (R-Calif.) to exemplify auto dealers loan financing from the Consumer Financial Protection Agency.

In a conference call Tuesday, President of Consumers for Auto Reliability and Safety Rosemary Shahan said, “the majority of car dealer profits are from the finance and insurance departments, which are much less transparent. Finance managers are paid on commission and their incentive is to maximize profits from the financing and the add ons.”

Shahan said one tactic used by some auto dealers is “yo-yo financing,” wherein the dealer will offer a reasonable and competitive interest rate, then switch to a much higher rate and force the consumer to resign a new contract with the higher interest rate.

“If [the consumer] doesn’t want that rate, [the dealer] will threaten to report the car as stolen or put pressure on the consumer to sign another contract with worse terms,” said Shahan.

Shahan also said this financing tactic is more frequently directed towards African Americans and Latinos.

The House Financial Services Committee began the markup of the The Consumer Financial Protection Agency bill last week, and continued through Tuesday. The bill was introduced to the House by Financial Services Committee Chairman Barney Frank (D-Mass.) on July 9, 2009.

In a statement, Frank said, “I am confident that we will produce a bill that will provide greater consumer protections while in no way burdening the legitimate activities of responsible banking.”

Susan Weinstock, Director of the Financial Reform Campaign for Consumer Federation of America, says an amendment proposed by Rep. John Campbell (R-Calif.) to the House Finance Services Committee on the Consumer Financial Protection Agency bill will exemplify auto lenders from the agency. The Consumer Federation for America is asking the committee to deny the amendment due to shady lending tactics used by some auto lenders. (0:16)

 

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Rosemary Shahan, President of Consumers for Auto Reliability and Safety, says auto-lenders often perform a “bait and switch” and increase interest rates on auto loans after a consumer has purchased a car. She says that this is why auto-lending ought to be included in the jurisdiction of the Consumer Financial Protection Agency. (0:19)

 

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House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) announced Thursday that a markup for legislation regarding a recently proposed Consumer Financial Protection Agency will occur in two weeks.

Frank said during Thursday’s hearing that the goal of the proposed agency is to streamline consumer protection rules and serve as a building block for financial reform.

“Consumer protection suffers very deeply and this bill would remedy that,” said Frank

The Massachusetts Democrat explained that if passed, the legislation would take power and funding from the Federal Reserve.

“We do not think that banks should be charged extra for this…the Federal Reserve will be ceding a lot of power that is not used very much and funding will come with it,” said Frank.

U.S. Treasury Department Director for Consumer Protection Peggy Twohig says that with a baseline of regulatory standards for financial institutions, innovation for the consumer can continue to thrive. Twohig said the Obama administration’s proposed Consumer Financial Protection Agency would create these standards. (0:31)

 

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U.S. Treasury Department Director for Consumer Protection Peggy Twohig says that the the monitoring of the financial system was unacceptable in the past. She says the Obama administration’s proposed Consumer Financial Protection Agency would help better regulate financial services and protect consumers. (0:47)

 

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Peggy Twohig, the U.S. Treasury Department’s Director for Consumer Protection, says that the Obama administration’s proposed Consumer Financial Protection Agency aims to consolidate the authority of regulation all into one agency. Twohig said it is necessary for all financial institutions to be bound to a specific set of standards. (0:25)

 

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Leah Valencia, University of New Mexico-Talk Radio News Service

U.S. Treasury Department Director for Consumer Protection Peggy Twohig said that establishing a far reaching financial regulatory agency could create a system of checks and balances for financial institutions, thus ensuring the strength of the U.S. economy.

“An agency would create uniform protection for consumers and make a level playing field for all types of financial services,” she said.

While discussing the Obama administration’s proposed Consumer Financial Protection Agency at the New American Foundation Friday, Twohig said it is necessary for all financial institutions to learn a sense of responsibility for the consumer by following base regulations

“The administration has supported that,” she said. “Part of the legislative proposal is for federal rules to be a floor not a ceiling that would apply to everyone.”

Twohig said there was not acceptable oversight of banking sectors in the past, adding that this caused a race to the bottom, where nonbank lenders offering aggressive products often steered consumers to unacceptable loans. As a result, banks who wanted to compete felt pressured and began to loan irresponsibly. Twohig said the proposed agency will prevent such an occurrence in the future.

“We need basic standards that will protect all consumers,” she said. “This will help the responsible players… who want to offer straightforward transparent products for consumers.”

Treasury Secretary Timothy Geithner explains why the newly proposed Consumer Financial Protection Agency must have the authority to both write and enforce rules for consumer protection. (0:33).

 

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