English Lessons

DIRECTIONS: Read the following and answer the questions?

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Didn’t we learn anything from the financial meltdown? Individual consumers cannot protect themselves from lenders that are willing to use predatory practices to boost profits. Reputable businesses cannot compete when competitors don’t play by the same rules.

The financial markets need a strong regulator, one that can take decisive action against bad actors. This is good for everyone.

1. It took a terrible recession to teach us an important lesson: Without proper regulation, financial markets can devastate the economy and hurt us all. Congress vowed this would never happen again, so last year it passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. That law created the Consumer Financial Protection Bureau.

The bureau, which officially opens for business July 21, will be empowered to protect the American consumer from unfair, deceptive or abusive practices. As envisioned by Dodd-Frank, the Consumer Financial Protection Bureau (CFPB) will:

• Improve disclosure about financial transactions
• Promote fair competition
• Reduce outdated or overly burdensome regulations
• Simplify paperwork and eliminate fine print that hides fees, penalties and other important information
• Hold companies accountable if they break the law

It’s hard to see what can be wrong about any of that, especially after well-documented abuses of the system brought the world’s largest economy to the brink of disaster.

Yet Republicans in Congress have never liked the idea of creating this new agency. They believe it is unnecessary and way too powerful. They’ve introduced a series of bills designed to muzzle this watchdog.

In a statement last week, Elizabeth Warren, the Harvard law professor President Obama tapped to create this consumer agency, said the bills are designed to "defund, delay and defang the consumer agency before it can help one family."

"These bills are about preventing the CFPB from operating effectively — a dangerous game to play in light of recent lessons in the marketplace and how quickly financial threats to consumers emerge,” she said.

Story: Congress may defang consumer agency before first bite

Consumer groups across the country have launched a full-scale counterattack against the proposals

“A vote to roll back this consumer protection bureau is a vote for the kind of predatory lending that got us in this mess and cost taxpayers so much,” says Kathleen Day with the Center for Responsible Lending.“It will make the recovery take longer, and we will end up with another bubble and bust.”

“Consumers are still dealing with financial tricks and traps even after Congress passed financial reform last year,” notes Travis Plunkett, legislative director at the Consumer Federation of America.“So we need a consumer protection bureau more than ever, to provide a cop on the beat to help consumers.”

Consumer advocates are also taking on the financial institutions that want the CFPB weakened.

“The banks do not want a regulator that is truly independent and has only one job, protecting consumers,”

Just last week the agency proposed simplified mortgage disclosure forms. These prototypes are shorter and easier to understand than forms given to potential borrowers now.

Warren says a clear and simple disclosure form will help people decide if they can afford the loan and make it easier for them to shop around for a better deal.

“One of the beauties of this agency is that you will not just send in your complaint and hope that someday the agency will sue a company for its wrongdoing,” notes Ruth Susswein with Consumer Action. “It actually has to respond to consumer complaints. It has to interact with people and not just collect complaints and that will be huge.”

My two cents The last Congress created this agency and the new Congress needs to give it a chance. I’d ask lawmakers to consider the words of Jamie Dimon, chairman and CEO of JP Morgan Chase. In his April report to shareholders Dimon wrote, “Strong regulatory standards, adequate review of new products and transparency to consumers all are good things.”

Didn’t we learn anything from the financial meltdown?

A. TRUE

B. FALSE

The last Congress created this agency and the new Congress needs to give it a chance?

A. TRUE

B. FALSE