Wednesday, July 20, 2011

The C.F.P.B.

Elizabeth Warren

Richard Cordray

If you've ever applied for a credit card or a loan of some type from a bank to buy a car, or a home, you know the paperwork involved can look pretty daunting. There is usually several sizes of font, from a 12 say, like the one I'm using right now, also there may be fonts that go all the way down to an 8, like this. Clearly the 12 font is easier to read for the average person than the 8, however all of the written language on the application, or contract is binding on those applying for the credit card or loan.
You may not believe this, dear readers, but the entities issuing those credit cards and loans, such as banks, may be trying to obscure certain provisions that may become deleterious to those applying.
Shocking, I know!
Why they may include something in the very small print that stipulates the credit issuer (bank) can raise the interest rates on the amount loaned anytime it wants to at any time, for any reason. Or that if you're two minutes late with your payment, the interest rate will shoot up to 98%. Or if you're three minutes late they are legally entitled to take your first born male child and keep them as indentured servants until your loan is fully paid (with interest payments, plus principle, approximately 472 years). All of this is in that fine print you can hardly read, and obscured further in a tangle of legalese that even lawyers would have trouble deciphering.
Deregulation, the lack of government rules toward the financial sector on Wall Street during the Bush Administration, is considered one of the main causes of the financial crisis of 2007/2008. Regulators turned their backs when the derivative market was created and banks were allowed to invent and market these questionable commodities without oversight. A housing bubble was created and mortgages were made available to those who could not reasonably afford them. Rating agencies like Moodys and Standard and Poors were allowed to give AAA rating on "Collateralized Debt Obligations" (CDOs) which were sold on Wall Street to unsophisticated investors who may or may not of even known what a "Collateralized Debt Obligations" was, but what the hell, they had a AAA rating from Standard and Poors, so it must be good. Well it turned out the rating agencies had a nice, cozy relationship with the banks issuing the CDOs, which later failed totally. There were no controls whatsoever for predatory lenders, etc.
You get the picture of what deregulation did for this country, a financial meltdown, Wall Street gets bailed out with tax payer money, Main Street gets screwed, a responsible President tries to clean up the mess, but can't do it in just the first two years of his term, so impatient voters allow the same party that caused the mess to get control of the House of Representatives, which is controlled by a group of Tea Baggers who are divorced from reality and are currently holding the country hostage through the manipulation of the country's debt ceiling.
We've met Elizabeth Warren before:
She's seems like a very nice lady.
When President Obama initiated his financial regulatory reform agenda a year ago it included something called the "Dodd–Frank Wall Street Reform and Consumer Protection Act," which was the "most sweeping change to financial regulation in the United States since the Great Depression." Within it was a provision to create an agency who's sole duty was to check on all of those investment banks, credit issuers, payday loans shops, etc.
Here, let Liz explain:
That agency was eventually called the Consumer Financial Protection Bureau (C.F.P.B.), which Liz thought up and advocated. One of the things she wanted to achieve was to make all of those loan and credit applications simple, clear and straight forward.
"It's past time for a change. We permit credit products to pass every day in commerce in America that if they were toasters, we would shut those folks down. You know, you can't give somebody a toaster that's going to explode ... We have a Consumer Product Safety Commission in the U.S. so every physical thing you touch, everything you wear, everything you smell is covered by some kind of basic safety regulation. But, you can buy credit cards that will take a family that's making it month by month—they're using it the way the card is supposed to be used. Just like plugging that toaster in and dropping the bread in it. Just like it's supposed to be used. And that card can explode on them and turn their financial lives upside down. We need the same, basic safety standards for credit products that we have for physical products. We cannot encourage companies to develop business plans that are modeled on selling people exploding credit cards. It just doesn't make any sense."
Elizabeth was named by President Obama to head the development of the Bureau, but held off naming her as the eventual Director of it.
Hey, guess what? The Republicans in Congress didn't like the idea of Elizabeth Warren heading the C.F.P.B. They didn't like the idea of the C.F.P.B. itself!
Shocking, I know!
Why would they not like it? They not only don't like it, they've been trying for an entire year to tear it apart, or defund it, or weaken it's powers altogether so it might as well not exist. Why?
Why wouldn't they want an agency designed solely to protect the consumer, the average person and family from greedy banks and lenders. Why wouldn't they like an agency and set of laws designed to regulate Wall Street excess?
I can't figure it out. The Republican party is the party of family values right? So they must want families to thrive rather than be prayed upon.
I think the Republicans may be hiding their true motives. I think they may have been lying to us.
Shocking, I know!
I think they want to have Wall Street deregulated again, so Wall Street can start the very same crap that caused the financial meltdown to begin with. I think they want to be allowed to suck the life blood out of every one in the middle class, in the country, until there is nothing left but dry husks. I think that is their overall goal and reason for existence.
That's what I think.
Elizabeth Warren says we can't allow that to happen.
The President chose the former attorney general of Ohio, Richard Cordray, to head the C.F.P.B. He was already working for the Bureau as head of the Enforcement Division. Elizabeth hired him, and has now endorsed his appointment. As the attorney general he was very good at investigating mortgage foreclosure practices.
He chose Cordray even though everyone wanted Warren because he thought he'd have a better chance of getting his nomination confirmed.
I don't know why.
“Richard Cordray has spent his career advocating for middle-class families, from his tenure as Ohio’s attorney general to his most recent role as heading up the enforcement division at the C.F.P.B. and looking out for ordinary people in our financial system,” Mr. Obama said in a written statement.
The Bureau needs to have an acting director because it cannot fully operate until the Senate confirms his nomination. It can supervise the compliance of banks with existing laws, but it can't develop new rules or supervise other financial companies without a director.
The Republicans say they are not going to allow his nomination to be confirmed. No way. They say they won't let anyone be confirmed as the director of the C.F.P.B because they still want to weaken it so it can't do the job it was designed to do, as Liz explained above. We'll see what happens.
“Rich has always had my strong support because he is tough and he is smart — and that’s exactly the combination this new agency needs,” Elizabeth said in a statement on Sunday. “His work and commitment have made it clear that he will make a stellar director.”
The C.F.P.B. will officially begin business tomorrow, the 21st. Here's a link to it's website:<

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