Rep. Barney Frank Optimistic Over State Of U.S. Economy

By Meagan Wiseley - University of New Mexico/Talk Radio News Service

Chairman of the House Financial Services Committee Barney Frank (D-Mass.) said Friday that on the economic front, America received good news and bad news today following the Labor Department's announcement of a 10.2% unemployment rate.

“Although 190,000 more American’s lost their jobs...that is substantially less than the pace at which they were losing jobs until fairly recently,” Frank said during remarks at a conference sponsored by NoLimits.org, a progressive on-line organization founded by Frank's sister.

Frank said the American Recovery and Reinvestment Act, or the stimulus bill, had a positive impact in deterring unemployment, explaining that unemployment rates would be higher if the stimulus bill hadn’t passed.

Frank also said that the lack of regulation in the financial sector, which he contributed to Alan Greenspan, the former Chairman of the Federal Reserve, led to the AIG crisis and the following recession. He praised the current Chairman of the Federal Reserve Ben Bernanke for his willingness to collaborate with Congress over new financial regulatory reforms.

Frank remained positive about the economic outlook.

“We are making progress ... things are getting better virtually on every front [and] I am confident that when we are through with financial regulations...the kind of things that got us in trouble in the past won’t get us in trouble in the future,” Frank added.

House Financial Services Committee To Start Markup Of Systematic Risk Bill Wednesday

By Meagan Wiseley - University of New Mexico/Talk Radio News Service

Chairman of the House Financial Services Committee Barney Frank (D-Mass.) told reporters at a press conference Tuesday that debate and markup of the Investor Protection Act will begin Wednesday and markup of other systematic risk legislation will follow.

“We will start the markup...beginning tomorrow, and everyday that the House is in session until we finish,” Frank said.

Following the consideration of the Investor Protection Act of 2009, the committee will begin markups of the Federal Insurance Office Act of 2009, the Financial Stability Improvement Act of 2009 and the Overdraft Protection Act.

Frank added that he expects aspects of the larger financial regulatory reform legislation, including the creation of the Consumer Financial Protection Agency, to be voted on by December.

“The earliest we can get to the floor will be the first week in December,” Frank said.

Republicans Concerned About Proposed Consumer Finance Protection Agency

By Ravi Bhatia-Talk Radio News Service

House Minority Whip Eric Cantor (R-Va.) and other Republican Congressmen delivered statements today at the U.S. Capitol opposing the proposed Consumer Finance Protection Agency.

The bill that would lead to its establishment, pushed by House Financial Services Committee Chairman Barney Frank (D-Mass.), would create an agency to oversee nearly all facets of consumer lending. The Committee will vote on the bill by the end of the week.

“Increased government regulation isn’t always the answer,” Cantor said. “We need, perhaps, smart regulation, but more [isn’t always] the right solution.”

Supporters of the bill say that the agency will pull together consumer oversight powers scattered among various agencies, making consumer interests a higher priority.

“The new Consumer Financial Protection Agency that I've asked Congress to create will have just one mission:  to look out for the financial interests of ordinary Americans,” said President Barack Obama in a statement released Oct. 9. “It will be charged with setting clear rules of the road for consumers and banks, and it will be able to enforce those rules across the board.”

However, the Republicans at today's briefing are concerned that the agency will concentrate too much power into one organization, or possibly even one person.

“What has been proposed by the Democrats is a new consumer finance rationing and design authority,” said Spencer Bachus (R-Ala.), ranking member of the House Financial Services Committee. “It gives one person - a credit rationing czar - the right to make all types of decisions. Of all the losers, the greatest loser, if this legislation passes, is going to be small business, because small business [is already] having trouble getting financing.”

UPDATE: By a tally of 32-29, the House Financial Services Committee voted to approve the Consumer Financial Protection Agency on Thursday.

Consumer Protection Activists Request Rejection Of Amendment To Financial Regulatory Bill

By Meagan Wiseley - University of New Mexico/Talk Radio News Service

The Americans for Financial Reform said today they are urging the House Financial Services Committee to reject an amendment that will be proposed by Rep. John Campbell (R-Calif.) to exemplify auto dealers loan financing from the Consumer Financial Protection Agency.

In a conference call Tuesday, President of Consumers for Auto Reliability and Safety Rosemary Shahan said, “the majority of car dealer profits are from the finance and insurance departments, which are much less transparent. Finance managers are paid on commission and their incentive is to maximize profits from the financing and the add ons.”

Shahan said one tactic used by some auto dealers is "yo-yo financing," wherein the dealer will offer a reasonable and competitive interest rate, then switch to a much higher rate and force the consumer to resign a new contract with the higher interest rate.

“If [the consumer] doesn’t want that rate, [the dealer] will threaten to report the car as stolen or put pressure on the consumer to sign another contract with worse terms,” said Shahan.

Shahan also said this financing tactic is more frequently directed towards African Americans and Latinos.

The House Financial Services Committee began the markup of the The Consumer Financial Protection Agency bill last week, and continued through Tuesday. The bill was introduced to the House by Financial Services Committee Chairman Barney Frank (D-Mass.) on July 9, 2009.

In a statement, Frank said, “I am confident that we will produce a bill that will provide greater consumer protections while in no way burdening the legitimate activities of responsible banking.”

Expect Debate On Proposed Consumer Financial Protection Agency To Take Place Soon

House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) announced Thursday that a markup for legislation regarding a recently proposed Consumer Financial Protection Agency will occur in two weeks.

Frank said during Thursday's hearing that the goal of the proposed agency is to streamline consumer protection rules and serve as a building block for financial reform.

"Consumer protection suffers very deeply and this bill would remedy that," said Frank

The Massachusetts Democrat explained that if passed, the legislation would take power and funding from the Federal Reserve.

"We do not think that banks should be charged extra for this...the Federal Reserve will be ceding a lot of power that is not used very much and funding will come with it," said Frank.