Sen. Bernie Sanders called Wednesday for a new Financial Product Safety Commission to protect consumers from abusive lenders and also announced a $130,000 federal grant to improve financial literacy for young people in Vermont. Sanders was joined at the press conference in Burlington, Vt., by Joseph G. Bergeron, president of the Association of Vermont Credit Unions, which will work with local business leaders, educators and volunteers, to teach middle and high school students the importance of financial literacy. “If there is anything that the current financial crisis has taught us it is that we have a responsibility to provide young Vermonters with the tools and the education they need to make sound financial decisions later in life,” Sanders said. “It is critical that we teach kids how to balance a checkbook, save money, qualify for a mortgage, and understand that if they take out a loan there is no such thing as free and easy money.”
The Obama administration, meanwhile, yesterday sent a detailed proposal to Congress that would establish a Consumer Financial Protection Agency to guard against lending practices like those that contributed to the financial crisis, The Washington Post reported. Sanders is a cosponsor of legislation by Sen. Dick Durbin, the Senate’s No. 2 leader, to create the new consumer commission.
“The federal government has a responsibility to protect consumers from unscrupulous, predatory, and deceitful lenders,” Sanders said. “While financial education is important, you should not need a law degree or a Ph.D. to understand the terms of a mortgage or a credit card.”
Other proposals by Sanders to reform the financial services industry include a serious investigation into the financial crisis to determine what happened and what we can do to make sure that it never happens again. He also wants a national usury law to cap credit card interest rates and fees, and he has proposed breaking up big banks like Citigroup, Bank of America, and JP Morgan Chase, and insurance companies like AIG, so taxpayers don’t have to bail them out if they fail again. “If an institution is too big to fail, it is too big to exist,” Sanders said.
Another bill by Sanders would make federal regulators use emergency powers to stop speculators on Wall Street from manipulating the price of gasoline, heating oil, and other commodities. Mounting evidence shows a recent run-up in oil and gas prices has little to do with supply and demand and everything to do with excessive speculation by some of the same Wall Street firms that received the largest taxpayer bail-out in the history of the world.
“Reforming Wall Street will not be easy,” Sanders said. “Over the past decade, the banking and insurance industries spent over $5 billion on campaign contributions and lobbying activities. They are spending even more today to prevent Congress from seriously reforming their industries. It is time that Congress stood up to these big financial interests and for the average American.”