Congress will try to tell you that it is on the verge of passing major reform that will help consumers and avoid “too big to fail” and other sound bites that the public will think are important. What the press and Congress will fail to tell you is that yesterday they gutted any real reform for consumers in this bill by passing the Carper Amendment, allowing federal preemption of state consumer protection laws against federally insured banks.
I do not believe that one federal Consumer Financial Protection Agency would have more power than 50 attorneys general and private attorneys enforcing state consumer protection laws against banks. Washington state was only able to stop predatory lending practices against Ameriquest and Household Finance on behalf of state residents because those companies were not federally insured banks. If our Attorney General had been able to sue WAMU on behalf of Washington state citizens or other banks that were swindling their clients, perhaps there would not have been a financial meltdown that almost caused another great depression.
For more information, see these articles from the Huffington Post‘s Stacy Mitchell: