Find the best credit card offers online.Recently, President Barack Obama announced his plan to create a new agency with the sole function of protecting the financial rights of consumers. The result was high praise from consumers and condemnation from the banking industry.
As the situation currently stands now, the job of regulating financial institutions falls on a number of regulatory agencies including the OCC or Office of the Comptroller of the Currency, the Federal Reserve and the FDIC or Federal Deposit Insurance Corporation. If the President’s planned consumer financial protection agency becomes true, it will be placed in charge of the protection of consumer finances and will take away these duties from the other agencies. The intended outcome will be a “level playing field” where standards for consumer protection will be the same for all the financial institutions in the country.
Consumers have been quick to praise the plan. Many of them say that the plan is long overdue. For a long time, the continued profitability of financial institutions have been prioritized over the protection of the consumers’ financial health. Whereas in the past and current situation, financial institutions had the option of looking around and choosing the weakest type of regulation for themselves, with the agency in place, the focus of regulation will be primarily on the consumers instead of the financial institutions.
Banking practitioners are crying out against the regulation, however. They are saying that the regulation would further burden them with regulation which could have a big impact o their business. During his testimony in the House Financial Services Committee, President of the American Bankers Association Edward Yingling stated that the primary cause of the economic crisis were not the banks but other financial institutions such as mortgage brokers who allowed loans that a banker never would. He concluded that it is unfair for the banking industry to be burdened for the mistakes of other financial companies.
However, Rep. Barney Frank, committee chair was unimpressed. “The federal regulatory system has clearly failed to provide adequate protection for consumers and that failure contributed to the broader economic crisis”, he said.
Meanwhile, consumers are also beginning to band together and fight for their financial rights, a feat made possible by through the convenience of the internet. Many consumers are now going online to air their grievances. They are doing this through blogging, commenting on government and private financial websites and generally getting together to talk about and protest unfair financial industry practices.
One such protest that is currently going on is against JPMorgan Chase which recently raised their monthly minimum payments from 2% to 5%. Affected card holders are taking part in online discussions over the sudden increase and many are beginning to call for action against it.
