Written by: andre cummings
The United States Senate will take up new financial sector regulation on Monday. Momentum has been growing in recent weeks as it now appears that new regulation will receive bipartisan support. The financial market crisis of 2008 has clarified the necessity that Congress better protect consumers from abusive Wall Street practices. The Senate must concern itself with turning banking back into an industry that promotes wealth across the country rather than the pre-crisis trend of reckless pursuit of ill-gotten profits. By establishing a Consumer Financial Protection Agency, Congress can commit to protecting American communities and consumers rather than protecting Wall Street’s recklessness.
That American consumers need protection from Wall Street abuse has been laid bare in both the bailout of Wall Street through TARP legislation and the irresponsible practices engaged in by Wall Street firms that precipitated the meltdown. Examples of Wall Street abuse abound. Matt Taibbi wrote a recent piece in Rolling Stone magazine discussing predatory deals that J.P. Morgan Chase conceptualized including one to finance a sewage treatment plant in Jefferson County, Alabama. While the plant project real cost was $250 million, J.P. Morgan Chase has extracted debt payments of $1.28 billion in interest alone from Jefferson County and its residents.
Further, recent credit card regulation was enacted to begin to prevent hidden fees and abusive practices Wall Street banks regularly engaged to profit at the expense of American consumers. J.P. Morgan Chase reports an expected revenue drop of $1.25 billion based on its new inability to hit credit card consumers with hidden fees and abusive costs. In both the sewage treatment plant financing and the credit card hidden fees scenarios, Wall Street banks were increasing its profits, not from traditional banking methodologies but from abusing consumers and communities. Main Street deserves better. Much better. Will Congress deliver?