CFSL Bulletin The latest Consumer Financial Services Litigation news, developments, and legal thinking

Tag Archives: Financial Services Committee

“Punk Staffers”: Criticism or Compliment?

Posted by Martin J. Bishop on Posted in Consumer Financial Protection Agency

After Senator Chris Dodd revealed his new financial regulation package on Monday, Ronald Orol of Market Watch reported that House Minority Leader John Boehner told attendees at an American Bankers Association meeting not to "let those little punk staffers take advantage of you and stand up for yourselves." Chairman of the House Committee on Financial Services, Barney Frank, took exception to the term "punk staffers."

In a letter to Boehner, Frank expresses his "disappointment" with "name calling," and urges Boehner to apologize to all staffers on Capital Hill. The letter, in its entirety, reads as follows:

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Barney Frank: The Credit CARD Act Is Working

Posted by Martin J. Bishop on Posted in Credit CARD Act

Today — the first day that many of the key provisions of the Credit CARD Act go into effect — Representative Barney Frank, chair of the Financial Services Committee, issued a press release in which he claims the Act is working and credit card holders are reaping the benefits. In support of the claim, Rep. Frank links to a PDF of a couple of letters from credit card companies. Representative Frank’s press release is reproduced below:

Washington, DC – Today, Financial Services Committee Chairman Barney Frank (D-MA) released the following statement on the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, and commented on the following letters that credit card companies have been sending to their customers as a result of the new law’s implementation.

“These letters indicate that Americans are now seeing the benefits of the CARD Act. It was unfortunately the case that some banks tried to game the system after we passed the bill into law, but their actions provide further evidence of our need for a Consumer Financial Protection Agency. While the House did pass a bill to speed up the implementation date of the CARD Act, there was an inevitable delay in the legislative process and Republican objections in the Senate blocked the bill. Had the CFPA been in existence we could have moved right away to block the banks’ egregious actions.”

In May, President Obama signed into law the Credit CARD Act, historic legislation that will protect consumers from deceptive credit card practices and equip them with the information and rights they need to responsibly manage their credit. Today, most of the key reforms are set to go in to effect, including prohibition of arbitrary interest rate increases and interest charges on debt paid on time (double-cycle billing ban).

For more information, click here.

Barney Frank Fires Back At “Innaccuracies”

Posted by Martin J. Bishop on Posted in Consumer Financial Protection Agency

Representative Barney Frank, chair of the House Financial Services Committee (“FSC”), has issued a memorandum to the members of the FSC addressing certain issues raised by various news publications. The substance of the memorandum is as follows:

Some inaccuracies have appeared in the press about institutions exempted from the reach of the Consumer Financial Protection Agency in the House-passed financial reform bill. For instance, yesterday’s New York Times reported that it “exempted smaller community banks, credit unions, retail merchants …”. Not true. All of those institutions will be subject to all rules issued by the agency with respect to the extension of credit. They also will be subject to agency enforcement. The exemption for smaller financial institutions is only with respect to examination which will continue to be the responsibility of the institutions’ prudential regulators. However, the CFPA will have back-up inspection authority and may independently take enforcement action. And even this exemption is limited to institutions with less than 2% of bank assets.

Importantly, the new agency will also have authority with respect to the now lightly or unregulated institutions such as pay day lenders and check cashers firms which are especially important to lower income families. It also will have authority over independent mortgage brokers and lenders that led the industry in issuing subprime and abusive option ARM mortgages.

Consumer protection has long been a weak link in our system of financial regulation and the meltdown of the subprime mortgage market is only the most dramatic example of the consequences of our failure in this area. The President’s position on closing this gap is of great importance.

Leading consumer protection advocates unanimously support the President. Harvard professor Elizabeth Warren said when the House bill passed, “the banks lost today.” That same day, Travis Plunkett from the Consumer Federation of America said that “The CFPA will allow consumers to shop or take out a loan knowing that there is an agency looking out for their best interests.”

Click here to read the memo as it appears on the FSC’s website.