Frank Statement on Consumer Protection
House Financial Services Committee Chairman Barney Frank (D-MA) today made the following statement about the need for increased consumer protection in the financial industry:
“I welcome Elizabeth Warren’s forceful Op-Ed in today’s Wall Street Journal making a strong case for increased consumer protection in the financial industry. No one familiar with the track record of the bank regulatory agencies with respect to protecting consumers can deny the need for an independent agency if we are going to have effective consumer protection. Bank regulators have traditionally treated their responsibilities for consumer protection as a second priority.
“Those who cite safety and soundness as a major reason to oppose increased consumer protection have it exactly backwards. In fact, the inability to protect consumers from abuse was a major cause of the financial crisis from which we are just emerging. Professor Warren importantly notes the example of Citigroup’s unsuccessful and unilateral attempt to bring fairness to credit card practices. This experience demonstrates that competitive pressures will obstruct reform unless it is done by thoughtful legislation and regulation that applies to all.
“I welcome Senator Dodd’s intention to fight to preserve an independent consumer agency, as we were able to do against the opposition of the financial industry in the House. Professor Warren’s statement today is a beginning to the national debate that we should have on this issue in the coming weeks.”