Many experts are of the opinion that the worst of the financial crisis is behind us. However, we are still not completely in the clear. It is always in the best interest of consumers to gauge their financial situation and not be lured in by rosy pictures painted by bankers, lending professionals, investment analysts and lending professionals. A common sense approach to the whole dilemma is that individuals are probably in the best position to judge their own financial situation in comparison to complex model created by professionals.
The Consumer FInancial Protection Agency – What It Means
This article is more in the wake of the fact that the financial industry and political spearheads are trying to fight the creation of the a new Consumer Financial Protection Agency. The creation of this agency would mean that some of the following industries would come under regulations and scrutiny. Examples of these are:
- Credit Cards
- Store Cards
- Home Loans
- Financial Advisory Services
- Credit Bureaus
- Collection Agencies etc.
The creation of this agency would mean that there would be new consumer and user-safety guidelines introduced to better protect consumers from the clutches of predatory practices prevalent in the financial industry.
Financial Bully Info For Consumers
- In a recent chain of events car dealerships have been placed beyond the scope of jurisdiction of the new Consumer Financial Protection Agency. This move comes of course for more obvious reasons. Come to think of it there are few other institutions on the planet, which would rip consumers off more than car dealerships. In addition there is severe push to get rid of the new agency altogether as most financial institutions prefer the state of chaos and confusion where they have a firm grip over their customers and where customers have no one to take their appeals to.
- With the relaxed lending practices NINJA loans became exceedingly popular and so did unregulated lending practices. This led to a severe economic downturn and even though the heads of several financial institutions met in the year 2006 they could not agree upon a set of regulations to filter applications and screen the approval process more carefully.
- It was not until 2008 that the Federal Reserve Intervened to ban unfair lending practices, This of course came 14 years after it had been handed absolute power by the congress and 2 years into the subprime crisis.
- At the moment predatory lending practices such as pay day loan institutions outnumber McDonald’s burger King and Wendy’s combined. No concrete action has yet been take to curb the geometric growth of these exploitive practices.
This brings to the point that some individuals may consider this as a mollycoddling approach. If you come to think of it the ones who are suffering the most are individuals who do not make bad decisions and are individuals who have no agency to go to protect themselves. However all this can change and consumer can voice their opinion. The entire copy of the 89 page bill by can be at the Wall Street Journal (1).
Remember it is your opinion and it should be voiced to ensure better consumer protection in the future.
References:
- Obama’s Financial Reform Plan – Wall Street Journal
- Fight the financial industry thugs – MSN Money
- Consumer Financial Protection Agency – LA Times