When it's Wall Street vs. us, don't put your wager on us
The short stories were easy to miss. A Thursday article described a new credit-card agreement that's easy to understand. A Friday piece told how Republicans blocked the confirmation of the man President Obama named to head a new government agency.
Not very sexy. The yawn-inducing vagaries of legal language and fine print, and yet more partisan infighting in this toxic political climate, this time over an agency you've probably never heard of. It was easier yet to miss the link between the two stories.
But taken together they illustrate how little-noticed events far from home reach into the local community and impact the everyday lives of your family, friends and neighbors.
The first story was about a new, simpler credit-card agreement that's getting a test run. If you have a credit card, you've entered into a legal contract with your bank that typically runs about 5,000 words, few of which you've probably read, many of them in fine print — and none of them there to protect you.
The Consumer Financial Protection Bureau launched the new agreement, which is written in — what a concept! — plain English. The document has only about 20 percent of the verbiage banks use and is broken down into three simple sections: costs, changes and additional information. You can check it out at www.consumerfinance.gov.
The form will be tested over the next six months at the mammoth Pentagon Federal Credit Union, and consumers will be asked to give feedback at the website above. Banks are not required to use the easy-to-understand form, but it could be a start toward a small but important — and much overdue — piece of reform of value to millions of plastic-toters.
The second story was an account of Senate Republicans derailing the appointment of Richard Cordray, a former Ohio attorney general, to head the new bureau that produced the user-friendly credit-card agreement prototype. The Senate on Thursday voted, 53 to 45, to reject a procedural motion to begin debate on the appointment. Only one Republican, Sen. Scott Brown of Massachusetts, sided with Democrats in voting to begin debate.
The Consumer Financial Protection Bureau was created under last year's Dodd-Frank financial reform legislation as the centerpiece of efforts at reform in the wake of the financial meltdown of 2008. A moderate piece of legislation that was greatly watered down after heavy lobbying by financial interests and their allies in the Congress, it charges the CFPB with overseeing payday lenders, private student loan providers and other nonbank lenders, certain mortgage originators and servicers, debt collectors and credit-reporting agencies. Those players make up a financial sector responsible for some of the most harmful and deceptive lending practices of the past decade.
The CFPB is the brainchild of Harvard law Professor (and now Massachusetts Senate candidate) Elizabeth Warren, who was passed over to lead the agency because Republicans objected to her, and because Cordray, although a Democrat, was considered more politically palatable. But Republicans, who had said for months they would block any nomination to run the agency, say it should have no director at all. They say it should be run by an "oversight board." And they want to require it to seek congressional approval of its budget instead of being funded by the Federal Reserve, of which it is a part.
Republicans denied they want to weaken the new agency or undermine its mission to protect Wall Street cronies.
"This notion we are against consumer protection, that we're trying to gut CFPB, is just silly," Sen. David Vitter, R-La., a member of the Senate's banking committee, declared with a straight face.
What's silly is to insist a new agency to protect consumers be run by a five-person committee, and that you get to hold the purse strings, and then to suggest there's any other explanation than the obvious: When it comes down to consumers vs. Wall Street, you're looking out for the Street.
Where does it go from here? Bet on Obama appointing Cordray to the post through a "recess appointment" when the Congress is not in session, probably in January, and Republicans howling that that's not fair, and off we'll go again.
In the meantime, the CFPB is overseeing mortgages to prevent some of the abuses that led to the mortgage meltdown, one of its main duties. It is not, however, doing anything about issues such as payday loan abuses. And as Washington watchers know, no agency in town is going to be effective without capable, energetic leadership.
In the classic TV sitcom "The Beverly Hillbillies," the money-hungry bank president, Mr. Drysdale, was always willing to jump through any hoops to toady up to the nouveau riche Clampetts. In real life, 99 percent of us are anonymous cyphers playing a zero-sum game with the colossus that is the financial industry.
You can see that reflected in the credit-card agreement most of us haven't read, and yet more clearly in the lives of low-income old folks, the working poor, students and others dealing with nonbank lenders that have been allowed for too long to have their own way.
Bill Varble is a freelance writer living in Medford. If you have comments or suggested topics for the column, please send them to email@example.com.