On the anniversary of the costliest financial bailout in U.S. history, we back President Obama's renewed call for the creation of a new agency to bring commonsense oversight to the financial services industry and, in the process, protect consumers, taxpayers and the economy from a repeat of the current fiasco.
The regulators responsible for making our financial system work have failed. That's clear from widespread foreclosures devastating millions of Americans and surrounding neighborhoods, from unfair bank overdraft fees and credit card practices that cost consumers tens of billions of dollars a year and from a host of other abusive loan products. These practices are riddled with tricks and traps that produce big fees and executive bonuses for banks and other lenders, but keep customers caught in unending debt.
Congress should act quickly to create the Consumer Financial Protection Agency so that individual Americans, who account for nearly $7 out of every $10 spent in the economy, can put the money that financial institutions unfairly siphon off to more productive purposes, like buying beneficial goods and services and saving for the future.
Sound, fair, commonsense rules of business are a cornerstone of free market competition, as the current crisis so painfully reminds us. Setting basic ground rules allows companies to compete on the value of their products, not on how many snares they've set for customers. It is the only way to restore trust in our financial system, and that's an essential first step to rebuilding our economy.
Michael Calhoun is the President of Center for Responsible Lending.
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