Hollywood's biggest names -- Ron Howard and Hans Zimmer, to name a few -- are getting behind bailout watchdog Elizabeth Warren's campaign for a Consumer Financial Protection Agency. And no, it's not a Hollywood self-serving campaign, but rather a means of using art to bring awareness. "Film and music have the power to open people's eyes," says Zimmer. "Especially with what is going on in the United States currently, people need to be activated and see what is happening with the economy." And no, it's not a Democrat vs. Republican issue. "This is bipartisan," explains Warren. "It's about consumers no matter what their political affiliations are."
Warren, a Harvard Law professor and chair of the Congressional Oversight Panel (formerly known as the Troubled Assets Relief Program) warns that unless an agency with real "teeth" is formed, Americans and small businesses will continue to be brought to their knees by the financial crisis.
The biggest questions is: Do we need yet another government agency?
"Ordinarily I would say no," explains Warren. "I'm not a government agency person. We have bloated bureaucracy already. While there are federal agencies in Washington that are in charge with part of consumer credit, it's not coordinated, it's ineffective and still governed by lobbying groups guarding financial instructions rather than consumers. "
Last May, President Obama, signed new rules for credit cards into law -- most of these policies come into effect this year. Warren compares the new rules to having "ten fence posts on a prairie" -- a great step forward but ineffectual unless someone makes the actually fence is built.
Warren first developed the idea for the agency in 2007, President Obama is an advocate, and it is now up for vote before the Senate Banking Committee.
Shouldn't consumers be responsible for their own financial decisions? Why should the government intervene?
"This agency is not your mother," Warren says. "The consumer has 100% responsibility, but that is not an excuse for a company to trick them. Costs and risks of credit should be visible and clear on all agreements."
During the early 1980s, credit card agreements were about one page long. Today, many are almost 30 pages in length, filled with complicated language and what Warren calls "tricks and traps."
"These agreements are not meant to be understood," she explains. "Financial institutions make over $100 billion in penalty feels and interest rates annually and that's off of credit cards alone."
Warren calls for one-page credit card agreements that take less that four minutes to read.
Many thought with TARP financials institutions were going to revaluate credit card debt and mortgages to helps consumers in crisis. "We said we were going to change the rules," Warren says. "And it didn't happen."
Personally, I don't believe in bigger government, and I think each citizen needs to be responsible for his or her own financial circumstances. I also don't think it is the responsibly of the American taxpayers to bail out financial institutions or lenders for bad practices. However, that's all already happened. If there is a way to avoid our country going further into the hole, and if consumer agency can truly hold Wall Street accountable for transparency and help consumers make better choices, it's worth a shot.
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