If we found out one thing from the financial crisis, it's that no one was looking out to protect consumers or keep Wall Street's irresponsible practices in check. We need to make the right changes to prevent another meltdown from happening and have someone to fight for the interests of the consumer.
I was a proud supporter of passing the most significant financial reforms since the Great Depression. I continue to fight to make sure it's implemented to its full effect. The legislation:
• Creates a new Consumer Financial Protection Agency to protect families and small businesses by ensuring that bank loans, mortgages, and credit cards are fair, affordable, understandable, and transparent.
• Ends predatory lending practices that occurred during the subprime lending frenzy.
• Shuts down "too big to fail" financial firms before risky and irresponsible behavior threatens to bring down the entire economy.
• Ends costly taxpayer bailouts with new procedures to unwind failing companies that pose the greatest risk – paid for by the financial industry and not the taxpayers.
• Tough new rules on the riskiest financial practices that gambled with your money and caused the financial crash, like the credit default swaps that devastated AIG, and common sense regulation of derivatives and other complex financial products. Includes a strong "Volcker rule" that generally restricts large financial firms with commercial banking operations from trading in speculative investments.
• Tough enforcement and oversight with more enforcement power and funding for the Securities and Exchange Commission, including requiring registration of hedge funds and private equity funds
• Enhanced oversight and transparency for credit rating agencies, whose seal of approval gave way to excessively risky practices that led to a financial collapse
• Reins in egregious executive compensation and retirement plans by allowing a 'say on pay' for shareholders, requiring independent directors on compensation committees, and limiting bank executive risky pay practices that jeopardize banks' safety and soundness.
• New protections for grocers, retailers and other small businesses facing out-of-control swipe fees that banks and other credit and debit card issuers charge these businesses for debit or prepaid-card purchases. As a result, merchants stand to save billions.
• Audits the Federal Reserve's emergency lending programs from the financial crisis and limit the Fed's emergency lending authority.
Credit Card Reform
In this tough economy, more and more people are turning to credit cards to pay for basic necessities. I hear from my constituents in Maine all the time that credit cards have become a necessity to keep the heat on or pay medical bills. But it seems that credit card companies are constantly dreaming up a new fee or another clever scheme to raise your interest rate. Basic fairness has been replaced by deception and greed.
The Credit Cardholders Bill of Rights, which went into effect in 2010, provides new protections for credit cardholders and creates new rules that protect American consumers from these practices. The law bans retroactive rate increases in most cases, requires 45 day advance notice of future rate increases, makes it more difficult for credit card companies to charge "over the limit" fees and prohibit credit card companies from charging cardholders when they pay online or over the phone.