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the banks and other financial firms that keep his campaign coffers
humming, as their chairman of the House Financial Services Committee.
On his extraterrestrial perch, camouflaged by his witty and irreverent
observations, he sees the agony of gouged, debt-ridden consumers and
homeowners, but his actions do not measure up.
As of this writing before the final set of hearings, Mr. Frank has
dropped key provisions from a proposal to establish an independent
Consumer Financial Protection Agency (CFPA).
The banks did not want a consumer right of action against companies
violating standards for their mortgages, credit and debit cards, or
payday and installment loans. Barney said sure!
The banks want a weak oversight panel consisting of their toady
regulators, who failed repeatedly and miserably in the past decade to
stave off the collapse of Wall Street and its economically lethal
consequences for workers and consumers. Barney said sure!
The banks want their buddies in Congress to drop the standard of
reasonableness by which the new consumer protection agency can go after
wildly gouging fees and deceptive practices, such as the check
overdraft racket that rakes in $40 billion for the banks. Barney said,
sure, sure!
The American Bankers Association is crowing like a thousand roosters.
The five biggest banks--now even bigger after the collapse, their
taxpayer bailout and their acquisitions--are crowing the loudest.
And why not? They speculated with retirement and other savings of the
American people. Trillions of dollars were drained from the accounts
and looted from these innocents.
Yet, the banks have every expectation that the Glass-Stegall
Act--repealed by Clinton, Citigroup and the Congress in 1999--will not
be reinstated to separate retail banking from investment banking and
block the conflicts of interest that ravage investors.
The Banks will still have their protective Federal Reserve which,
though empowered by a 1994 law to crack down on predatory lending, did
nothing to stop the subprime mortgage rackets that submarined the
housing economy.
Smelling a concessionary Barney Frank, other businesses want exemptions
from the new consumer agency's authority, including auto dealers,
realtors, merchants, retailers and assorted other players in the fine
print game of financial services.
Massively possessed by the sneering arrogance of the corporate state,
these big banks are still granting huge bonuses to their management and
top bosses, while the taxpayers of America are subsidizing them and
bailing them out. Their chosen Secretary of the Treasury, Timothy
Geithner conceded that the U.S. government is now insuring, not just
the deposits of big banks, but their capital as well.
Most stunning to Americans, right or left, who follow these big money
boys is that they are developing more speculative derivative packages,
loaded with luscious fees, such as securitized bets on life insurance
policies. Does this remind you of the kind of financial wheeling and
dealing that sank Wall Street and the economy last year?
Naturally, consumer groups like the National Community Reinvestment Coalition (http://www.fairlending.com) and the U.S. Public Interest Research Groups (USPIRG) (http://www.uspirg.org)
who have provided excellent testimony in recent months about what the
exploited consumers and savers need at long last, are disappointed. But
they, and the Consumer Federation of America (http://www.consumerfed.org)
are facing an overwhelming resource mismatch with the financial
businesses. These businesses are deploying armies of lobbyists on
Capitol Hill and hosting hundreds of campaign cash parties.
In an excellent article in the New York Times, regular columnist Joe
Nocera, asks the question--"Have the Banks No Shame?" He starts his
reply by quoting Simon Johnson, a former economist with the
International Monetary Fund: "They can't pay what they owe!" he began
angrily. Then he paused, collected his thoughts and started over: "Tim
Geithner saved them on terms extremely favorable to the banks"What gets
me is that the banks have continued to oppose consumer protection. How
can they be opposed to consumer protection as defined by a man who is
the most favorable Treasury secretary they have had in a generation"It
is unconscionable."
Well said, but not enough. As long as the top banking bosses get their
huge bonuses and their mismanaged, corrupted banks get their taxpayer
bailouts, because they are too big to fail, they will continue pushing
their devastating greed with impunity.
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