Butchers offer financial services? “Completely false,” says Obama

October 9, 2009

President Barack Obama started his day by learning he had won the Nobel Peace Prize,  but that didn’t stop him from quickly turning downright prickly.

After a meeting with Americans who had been ripped off by the financial system, Obama on Friday said big banks and the U.S. Chamber of Commerce were trying to block some of his efforts at financial regulatory reform.

They specifically want to torpedo his plan for a Consumer Financial Protection Agency, he said. Legislation creating the agencyOBAMA/ is now working its way through Congress.

The proposed agency would help ordinary people who borrow money for homes or other purposes, he told an East Room gathering at the White House.

It would get rid of those “ridiculously confusing contracts” that govern everything from credit cards to home mortgages.

“A lot of the banks and big financial firms don’t like the idea of a consumer agency very much,” Obama said. “In fact, the U.S. Chamber of Commerce is spending millions on an ad campaign to kill it.”

It was the ads that aggravated him.

“You might have seen some of these ads — the ones that claim that local butchers and other small businesses somehow will be harmed by this agency,” he said. “This is, of course, completely false.”

“We’ve made clear that only businesses that offer financial services would be affected by this agency. I don’t know how many of your butchers are offering financial services,” the president added.

cfpa_ad1He noted the Chamber had spent nearly half a billion dollars to lobby the government over the past decade.

And he said big banks were trying to maximize “their profits at the expense of American consumers, despite the fact that recently a whole bunch of those same American consumers bailed them out as a consequence of the bad decisions that they made.”

The Chamber of Commerce, seeing the attack coming, put out a note in advance saying they completely agree that consumers need protection.

They just don’t think a big new federal agency should be created to provide the protection.

Instead, the Chamber favors leaving consumer protection to the six federal regulators already doing the job. Their powers could be beefed up so they could become even more effective, it said.

And that ad about the local butcher?

The Chamber says a Consumer Financial Protection Agency would have sweeping authority over virtually every business that extends credit to American consumers.

So if the local butcher lets his customers pay him tomorrow for hamburger meat today,  he might be seen as offering financial services and his books could be open to federal scrutiny.

The agency would “have the ability to collect information about his customers’ financial accounts and take away many of their financial choices,” the Chamber’s ad says.

What do you think? Does that ring true?

For more Reuters political news, click here.

Photo credit: Reuters/Jason Reed (Obama makes remarks on financial regulatory reform Oct. 9 in the East Room of the White House)

9 comments

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Duh! No, oversight of financial institutions doesn’t mean your name and personal financial information will be coughed up by everyone else you do business with including your bank. But the Chamber is counting on the fact that most Americans read at the 4th grade level and so won’t understand the twisted logic of their self-serving warning. The Chamber of Commerce is dedicated to one thing only – helping their members make more money. Rule of thumb – if the Chamber is behind it, it will cost you money.

Posted by Mary-Louise | Report as abusive

we need less government agencies, not more. more agencies equals more government employees equals more taxes to pay for them. more agencies equals more regulations to justify their existance equals less freedom. less federal involvement if anything needs to be done it should be done on a state or local level. no government agency has ever shrunk or found a way to be less intrusive, big brother is out of control, this is just another way for career politicians to reward their cronies and control our lives.

Posted by Tagg Gnostic | Report as abusive

It is high time government stop the interference of the economy. There was argument that the financial crisis was bought about by the limits of the Invisible Hand. Nothing can be further from the truth. It was caused by the meddling of the monetary policies imposed by the government.

It caused trillions to get out of that mess. Hopefully hands off the Invisible Hand and lets not play with fire anymore. Big government suffer from the diseconomy of scale, no more agencies, I feel that the private sector is more than capable of handling itself.

Strange we really seem to go for those who are well of, those who do not want interference in the workings of their opportunities. The workings of hard core cpaitalism.

No if we want a sustyainable society, Mr. Obama has got the right ideas.

Posted by Jens Bos | Report as abusive

Obama wants to do away with all the pages and forms? HaHa!! First, focus on the 1000 pages in HC3200. Then fix all loopholes. NO more government interference Obama! Everytime you guys touch the economy, things go south. Leave it alone, we the people will fix it ourselves. We do not trust you anymore.

Posted by Alheimstead | Report as abusive

What the heck are you people talking about?

The economic crisis having come about BECAUSE OF regulation?

Are you stupid, blind, or just indignantly FLAGRANTLY stupid?

It was greed— pure and simple greed—– and financial companies
taking bigger and bigger risks with less and less reasonably sound financial
instruments that caused the damned mess that we’re in, and don’t you dare forget it.

How ON EARTH would an agency who’s there to protect consumers— that’s right— the AVERAGE JOE & JANE AMERICAN— from carnivorous malicious unscrupulous business practices—- how on earth is that pushing us further toward the financial meltdown of our entire nation that rampant DE-REGULATION was very aptly bringing to bear?

Posted by Honest Abe | Report as abusive

What?!! Banks want to make money? At the expense of consumers? I thought they were charitable organizations! At least I can trust the federal government to …spend …wisely.

So even though consumer protection already has federal oversight, we’re creating a new and bigger agency for the same purpose?

Will it stop consumer greed? Will this agency deny loans for houses deemed too expensive, or reduce overspending with credit cards?

We need an agency to protect the public from Congress’ overspending and stupid decisions. Witness the national debt, Fannie & Freddie.

Posted by Judicious George | Report as abusive

Follow-up question, Mr. President…

If the big banks are so bad [ie carnivorous malicious unscrupulous business practices] that you need to protect us, why did you bail them out when they were headed for a fall?

Could it be that in view of the current federal oversight this new agency is not needed, but instead amounts to a payback for political favors, or a grab for more power?

Posted by Judicious George | Report as abusive

Why is it that progressive-types always want NEW government agencies when the ones they created before prove not to be effective?

It’s like the infrastructure spending – it doesn’t fix hardly anything out there now because a politician can’t put his name on a bridge which was already built by some previous politician. Only NEW bridges (or agencie) can be named after the current politician.

Obama ought to be concentrating on making the government he has work instead of creating another one on TOP of the one his predecessors put in place. Effeciency does not require ‘new’. We don’t need ‘new’ gun laws, we don’t need ‘new’ food safety laws, we don’t need ‘new’ regulations over investments. We just need to punish the people who broke the ‘old’ laws and do a better job with the taxpayers $$ in enforcing the millions of regulations already on the books.

Posted by bruce stravinsky | Report as abusive