2nd UPDATE: Obama Steps Up Push For Consumer Financial Protection
(Adds quotes, background.)
WASHINGTON -(Dow Jones)- Ratcheting up his drive for new financial
regulations, President Barack Obama took direct aim at the industry groups that
oppose his proposed Consumer Financial Protection Agency, calling their
criticism "completely false."
"They're doing what they always do - descending on Congress and using every
bit of influence they have to maintain a status quo that has maximized their
profits at the expense of American consumers, despite the fact that recently a
whole bunch of those same American consumers bailed them out as a consequence of
bad decisions that they made," Obama said in a speech at the White House Friday.
"Since they're worried they may not be able to kill this agency, they're trying
their hardest to weaken it."
The consumer agency is one of the primary components of the regulatory revamp
Obama wants lawmakers to pass before the end of the year. But it has come under
fire from Republicans and Wall Street. The banking sector has been lobbying to
water down the legislation so the agency doesn't have the ability to enforce the
rules that it writes.
Obama, however, signaled that the agency must be given the teeth to be
effective.
"The consumer agency we're proposing would set ground rules so that firms
don't have to compete to confuse families, but to give them better choices," he
said. "This will also help small-business entrepreneurs who often rely on credit
cards and home-equity loans to finance their start-ups."
Obama had sharp words for his opponents, calling out the U.S. Chamber of
Commerce in particular for spending "millions" on a public campaign to kill the
agency.
"You might have seen some of these ads - the ones that claim local butchers
and other small businesses will somehow be harmed by this agency," Obama said. "
This, of course, is completely false - and we've made clear that only businesses
that offer financial services would be affected by this agency."
He also shot down concerns that the agency would restrict consumer choice and
innovation in the financial arena: "Nothing could be further from the truth."
The Chamber of Commerce, in a statement front-running Obama's remarks, said
existing regulators should have their powers expanded to crack down on predatory
practices, but repeated that it views the new agency as the wrong approach.
"We disagree that a massive new federal agency with unprecedented powers over
vast segments of the business community will be good for consumers, for
America's job creators or for the economy," David Hirschmann, president of the
Chamber's Center for Capital Markets Competitiveness, said in the statement. "We
disagree that adding a new agency atop a broken regulatory system solves the
problem or closes regulatory gaps. And, we don't agree that consumers are well
served by allowing the states to each create different disclosures, and
regulations on top of those created by the proposed new regulator."
Obama was joined at the White House be a who's who of administration officials
and regulators, including Treasury Secretary Timothy Geithner, FDIC chief Sheila
Bair and CFTC head Gary Gensler.
In an effort to rally public support for the regulatory rewrite and show the
stakes for regular Americans, Obama also met Friday with four people the White
House said have been hurt by outdated financial regulations. One of them, Karen
Cappuccio, a 31-year-old supervisor at the Transportation Security Association,
fell victim to unscrupulous practices by a mortgage broker. Another, Maxine
Given, 44, was incorrectly charged $148 in overdraft fees.
"Abuses like these don't just jeopardize the financial well-being of
individual Americans - they can threaten the stability of the entire economy,"
Obama said. "And yet, the patchwork system of regulations we have now has failed
to prevent these abuses."
-By Henry J. Pulizzi, Dow Jones Newswires; 202-862-9256; henry.pulizzi@
dowjones.com
(END) Dow Jones Newswires
10-09-091527ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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