Frank statement on Congresswoman Bachmann’s effort to repeal the Dodd-Frank Act

Washington, D.C. – Congressman Barney Frank, Ranking Member of the House Financial Services Committee, released the following statement in response to Congresswoman Michele Bachmann’s effort to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act:

“Michele Bachmann, the Club for Growth, and others in the right-wing coalition have now made their agenda for the financial sector very clear:  they yearn to return to the thrilling days of yesteryear, so the loan arrangers can ride again – untrammeled by any rules restraining irresponsibility, excess, deception, and most of all, infinite leverage. 

“Their effort to repeal the new financial reform law reveals the hypocrisy of right-wing claims that they are concerned with ending uncertainty in the economy. Now that we have put in place a set of rules that allow financial markets to function but which also curb their excesses, Representative Bachmann and her allies want to reintroduce uncertainty by going back to exactly the situation that led to the financial crisis in the first place.

David Silberman to run credit card unit of the Consumer Financial Protection Bureau

Elizabeth Warren, the special White House adviser assigned to set up the Consumer Financial Protection Bureau, has selected David Silberman of the Kessler Group to run the unit that will research and write rules for credit cards, according to…

Read more about this major appointment as reported by Bloomberg.

Elizabeth Warren replies to my e-mail

I often hear people complain about the arrogance, self-importance, and off-putting nature of Harvard students, alumni, and professors.  This couldn’t be farther from the truth—well, at least my truth.  My experience has been the complete opposite of the nose-tilting stereotype. In fact, I have found these same people, especially professors, to be some of the most down-to-earth, engaging, and accessible people.

Small business lending in local markets the subject of Feb. 26 hearing

The following notification was released today by the House Committee on Financial Services:

Small Business, Financial Services Committees to Hold Hearing on Small Business Lending in Local Markets                         

Washington, DC — Today, Small Business Committee Chairwoman Nydia Velázquez and Financial Services Committee Chairman Barney Frank announced a joint committee hearing on February 26 to examine the condition of small business and commercial real estate lending in local markets. Witnesses will be announced at a later date.

Who: House Small Business Committee, House Financial Services Committee 

What: Joint Hearing: “Condition of Small Business and Commercial Real Estate Lending in Local Markets”

When: Thursday, February 26, 10:00 a.m.

Where: Room 2128, Rayburn House Office Building

Do we keep the Federal Reserve or get rid of it?

Since day one of the great recession, there has been much criticism of the Federal Reserve.  Led by vehement critics such as Republican Congressman Ron Paul of Texas, those who call for the abolition of the Fed claim that it does more harm than good. One expert economist, Dean Baker, says that the Fed “bears substantial responsibility for the current crisis”.

I disagree. While there are some structural changes and practices that I think the Fed can improve or discontinue, I would not support its entire annihilation. I suggest we change what is wrong and keep what is right. 

One of the things that the Fed got right was credit card reform.  Before any legislation was passed in the House or Senate, the Federal Reserve proposed and approved sweeping changes to curb the out-of-control abuse of credit card customers.  Do you remember?  In Dec. of 2008, the Fed announced that it received over 65,000 complaints from consumers about credit card companies, and as a result, decided to implement major changes. The Fed’s leadership in responding to the people gave the legislative process validation and needed momentum. 

Barney Frank releases memo to dispel inaccuracies about CFPA exemptions

Washington, DC – Today, House Financial Services Committee Chairman Barney Frank (D-MA) released the following memo to members of the House Financial Services Committee: 

January 21, 2010

MEMORANDUM

TO: Members, Committee on Financial Services

FROM: Chairman Barney Frank

RE: Inaccuracies about CFPA Exemptions

Some inaccuracies have appeared in the press about institutions exempted from the reach of the Consumer Financial Protection Agency in the House-passed financial reform bill.  For instance, yesterday’s New York Times reported that it “exempted smaller community banks, credit unions, retail merchants …”.  Not true.  All of those institutions will be subject to all rules issued by the agency with respect to the extension of credit.  They also will be subject to agency enforcement.  The exemption for smaller financial institutions is only with respect to examination which will continue to be the responsibility of the institutions’ prudential regulators.  However, the CFPA will have back-up inspection authority and may independently take enforcement action.  And even this exemption is limited to institutions with less than 2% of bank assets.

Importantly, the new agency will also have authority with respect to the now lightly or unregulated institutions such as pay day lenders and check cashers firms which are especially important to lower income families.  It also will have authority over independent mortgage brokers and lenders that led the industry in issuing subprime and abusive option ARM mortgages.

Senate Judiciary Committee to hold hearing on abusive credit card practices

On Tuesday, Mar. 24 at 10 a.m., The Senate Judiciary Committee will hold a hearing on “Abusive Credit Card Practices and Bankruptcy”.  The hearing will be conducted by the Subcommittee on Administrative Oversight and the Courts. 

Merchants: Profiling bad for business, but higher merchant fees worse

I was very busy on Capitol Hill today.  Once I figured out my way around Washington, D.C. using the Metro, which is great by the way, I met with important people and organizations that can help increase regulation for credit card companies. 

For this post, I focus on my first meeting with a merchant organization.  The organization, which has members like Walmart and other major retailers, is large and has considerable influence on affecting national policy.