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Wall Street and Republicans Play Whac-A-Mole with Wall Street Reform

Deputy Communications Director Jen Psaki debunks the latest attacks from opponents of Wall Street Reform, this time on the consumer protections.

First they said the Wall Street Reform bill was a "bailout."  They thought they’d found the winning strategy to kill reform.  But there was one problem: it wasn’t true.  And with all the facts against them, there was only so long they could use that argument as an excuse for delay.

Now, less than forty-eight hours after Republicans finally allowed the Senate to begin debating Wall Street Reform, they have moved on to the next strategy: claiming that a bill designed to empower consumers is actually some kind of massive government takeover.

But there's one problem: it’s no more true than the bailout argument.

Today, seven different Federal agencies have authority to write rules for consumer financial products and services, enforce the rules, or both.  But most of them are only focused on the health of banks, and none sees consumer financial protection as its top priority.  Meanwhile, big parts of the market for consumer financial services operate without any real oversight at all.

Instead of this inefficient, ineffective system, the Senate bill will establish an independent bureau of consumer financial protection with a straightforward mission: to prevent abusive and deceptive practices by providers of financial services and to promote transparency and consumer choice.

The case for this reform couldn’t be more clear.  The current system has left millions of Americans -- including servicemen and women, college students and working families across the country -- vulnerable to predatory lending and other abusive practices.  And poor oversight of the mortgage lending market contributed to the financial crisis in the first place.

This is not about inserting the government where it doesn’t belong.  It’s about making sure that consumers can get the information they need to make the financial choices that are right for them.

This isn’t about burdening community banks with more regulation.  It’s about holding non-banks like mortgage brokers to the same standards as the local banks they compete against.

And no matter how much the Republicans try to scare small business, this isn’t about regulating dentists or grocers.  It’s about holding unscrupulous credit providers, be they payday lenders or auto lenders, accountable -- so that they can’t trap customers with misleading terms buried in the fine print.  This is good for families and this is good for those fair and honest credit providers who play by the rules and can now face a level playing field.

While Republicans play Whac-A-Mole with financial reform, President Obama is trying to fix a system that we all know is broken.  He has been clear from day one that a consumer agency must be independent, with independent authority, funding, rule-writing and enforcement.

We owe it to the American people to give them an advocate and we won't stand by while defenders of Wall Street attempt to weaken protections for consumers.

Jen Psaki is Deputy Communications Director