Groups Mull 'Harry And Louise' Ads To Sink Consumer Agency
By Jessica Holzer, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Financial industry and other business groups are
considering running "Harry and Louise"-style ads to sway public opinion against
the Obama administration's proposed Consumer Financial Products Agency.
The original Harry and Louise television spot, financed by the insurance
industry, helped defeat the Clinton health plan in the early 1990s. In the
commercial, a middle-class married couple laments they are worse off under the
new health-care regime, describing it as a bureaucratic nightmare.
The spot struck a chord with voters. Financial industry lobbyists hope the
same strategy will turn middle America away from the consumer agency, which is
gaining momentum in Washington. The agency would have oversight over all credit
products, including mortgages, credit cards and auto loans.
"The CFPA will result in higher costs of goods and services, decreased
availability of products, and more confusion for consumers," Financial Services
Roundtable Senior Vice President Scott Talbott contended. "There is a more
effective way to strengthen the system."
Four public relations firms, including Powell Tate and Direct Impact, pitched
their ideas for the television spot at a meeting this week, according to people
who were there. Representatives from the National Association of Realtors, the
American Bankers Association, the Mortgage Bankers Association and the Financial
Services Roundtable attended the meeting, which was organized by the American
Financial Services Association.
A spokeswoman for Direct Impact declined comment. Representatives for Powell
Tate couldn't be immediately reached for comment.
"We're not considering running ads against anything as much as trying to ...
ensure we don't move forward, in the haste to do something, with the wrong type
of approach," AFSA Executive Vice President Bill Himpler, who is spearheading
the effort, said.
The trade groups haven't formed a formal coalition to fight the proposal nor
made a decision to run any ads. "By no means does our attendance mean that we
are in agreement" with the ads, Realtors spokeswoman Mary Trupo said. The
Realtors' group hasn't taken a stance yet on the proposed agency, she said.
However, there is pressure to settle on a strategy quickly as House Financial
Services Chairman Barney Frank, D-Mass., plans to pass legislation creating the
new agency through his panel later this month.
Trade groups have met informally over the past couple weeks to talk strategy.
There's an effort to broaden the coalition beyond the financial-services
industry by recruiting groups such as the National Association of Home Builders
and the National Auto Dealers Association for example, according to people
familiar with the matter.
"We're having conversations about how do we help the average consumer
understand how badly they would be affected by this proposal," American Bankers
Association Executive Director Wayne Abernathy said. He said he wasn't privy to
the discussions on running ads.
The proposed consumer protection agency would have the power to require firms
to offer "plain vanilla" products, with simple terms and disclosures alongside
more complex products.
The agency would be able to issue new regulations protecting consumers and to
ban certain practices. And it would have power to examine institutions for
compliance with its rules and to hand down orders, fines and penalties to rule-
breakers.
It is unclear how the new agency would be funded, though it's likely the
industry would have to cover at least a portion of its costs. The banking
industry warns that separating consumer protection from prudential oversight of
institutions could damage the financial system.
Such concerns "really are overblown," said Treasury's Deputy Assistant
Secretary for Consumer Protection Eric Stein, who helped design the
administration's proposal.
Stein also disputed the new agency would constrict consumer choices. "The
administration would like to tilt the playing field a little bit toward simple
products," he said. "There's not desire to force people to take loans they don't
want or to ban products altogether."
- Jessica Holzer, Dow Jones Newswires; 202-862-9228; jessica.holzer@
dowjones.com
(END) Dow Jones Newswires
07-02-091653ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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