Guest perspective by Ralph Nader
What planet is Congressman Barney Frank on, anyway? It is the planet of the banks and other financial firms that keep his campaign coffers humming, as their chairman of the House Financial Services Committee.
On his extraterrestrial perch, camouflaged by his witty and irreverent observations, he sees the agony of gouged, debt-ridden consumers and homeowners, but his actions do not measure up.
As of this writing before the final set of hearings, Mr. Frank has dropped key provisions from a proposal to establish an independent Consumer Financial Protection Agency (CFPA).
The banks did not want a consumer right of action against companies violating standards for their mortgages, credit and debit cards, or payday and installment loans. Barney said sure!
The banks want a weak oversight panel consisting of their toady regulators, who failed repeatedly and miserably in the past decade to stave off the collapse of Wall Street and its economically lethal consequences for workers and consumers. Barney said sure!
The banks want their buddies in Congress to drop the standard of reasonableness by which the new consumer protection agency can go after wildly gouging fees and deceptive practices, such as the check overdraft racket that rakes in $40 billion for the banks. Barney said, sure, sure!
The American Bankers Association is crowing like a thousand roosters. The five biggest banks--now even bigger after the collapse, their taxpayer bailout and their acquisitions--are crowing the loudest.
And why not? They speculated with retirement and other savings of the American people. Trillions of dollars were drained from the accounts and looted from these innocents.
Yet, the banks have every expectation that the Glass-Stegall Act--repealed by Clinton, Citigroup and the Congress in 1999--will not be reinstated to separate retail banking from investment banking and block the conflicts of interest that ravage investors.
The Banks will still have their protective Federal Reserve which, though empowered by a 1994 law to crack down on predatory lending, did nothing to stop the subprime mortgage rackets that submarined the housing economy.
Smelling a concessionary Barney Frank, other businesses want exemptions from the new consumer agency’s authority, including auto dealers, realtors, merchants, retailers and assorted other players in the fine print game of financial services.
Massively possessed by the sneering arrogance of the corporate state, these big banks are still granting huge bonuses to their management and top bosses, while the taxpayers of America are subsidizing them and bailing them out. Their chosen Secretary of the Treasury, Timothy Geithner conceded that the U.S. government is now insuring, not just the deposits of big banks, but their capital as well.
Most stunning to Americans, right or left, who follow these big money boys is that they are developing more speculative derivative packages, loaded with luscious fees, such as securitized bets on life insurance policies. Does this remind you of the kind of financial wheeling and dealing that sank Wall Street and the economy last year?
Naturally, consumer groups like the National Community Reinvestment Coalition (http://www.fairlending.com) and the U.S. Public Interest Research Groups (USPIRG) (http://www.uspirg.org) who have provided excellent testimony in recent months about what the exploited consumers and savers need at long last, are disappointed. But they, and the Consumer Federation of America (http://www.consumerfed.org) are facing an overwhelming resource mismatch with the financial businesses. These businesses are deploying armies of lobbyists on Capitol Hill and hosting hundreds of campaign cash parties.
In an excellent article in the New York Times, regular columnist Joe Nocera, asks the question--“Have the Banks No Shame?” He starts his reply by quoting Simon Johnson, a former economist with the International Monetary Fund: “They can’t pay what they owe!” he began angrily. Then he paused, collected his thoughts and started over: “Tim Geithner saved them on terms extremely favorable to the banks…What gets me is that the banks have continued to oppose consumer protection. How can they be opposed to consumer protection as defined by a man who is the most favorable Treasury secretary they have had in a generation…It is unconscionable.”
Well said, but not enough. As long as the top banking bosses get their huge bonuses and their mismanaged, corrupted banks get their taxpayer bailouts, because they are too big to fail, they will continue pushing their devastating greed with impunity.
The issue is not only shame. The issue is guilt and for that, prosecution, conviction and incarceration are the remedies. That is the only prospect that sobers up the corporate crooks.
Adequate prosecution budgets, tougher corporate criminal laws and a government going for law and order—none of these are in any legislative proposals or in the hearts and minds of our Washington representatives.
So, sovereign citizens everywhere, if you don’t organize to have the say, you’ll continue to pay, pay and pay. Time to make apathy boring!