Thursday, 3 September 2009

House vote on CFPA scheduled for September 23

The CFPA will give the government huge controls over the consumer lending industry - including credit cards, mortgages, and other financial products. There are already four oversight agencies "protecting" consumers in this area - what will an additional blanket agency do? This legislation will not protect stupid people from themselves, but it will restrict free enterprise, putting small and large businesses under even more regulations and restrictions.

Many of the groups pushing the CFPA are the same groups who lobby for banks to provide below-market-rate mortgages to low income homebuyers, and for legislation giving millions of dollars to homeowners who cannot afford to pay their mortgages. For these groups it is always the bank's fault and never the consumers. Owning a home is not a human right. When I worked as a credit analyst I frequently dealt with people who thought getting a loan (to buy stuff like new furniture, televisions and jewelry) was their right, regardless of their credit history. As I have said before there are plenty of places to spread the blame for the current economic situation - but to lay it all at the feet of banks is ridiculous.

These days banks are hounded until they agree to give people credit at below-market rates, people literally scream at the creditor until they are given a credit limit they should not have, and if people cannot get credit from their home bank they will go to a subprime or predatory lender. When many of these people can no longer make payments on purchases they insisted were their right to make, it is the bank's fault. Suddenly these people, who bought stuff they could not afford, are victims who did not understand what they were getting into - victims who need the government to protect them. How can the government protect people who do not understand the terms of a contract/service agreement? Are they going to send agents to sit with every individual seeking credit to ensure they are not making a bad decision? When will someone create the Agency to Stop Consumers from Buying Stuff They Can't Afford?

The vote is scheduled for September 23.