Congress Fiddles While Anger at Wall Street Burns: Plain Dealing

Publication: The Plain Dealer

Author: Sheryl Harris


10/08/2011 - The Senate banking committee's vote last week to approve Richard Cordray's nomination to lead the Consumer Financial Protection Bureau gets him one step closer to not being confirmed.

With 44 senators having already pledged to block confirmation of any candidate for director unless the White House agrees to changes that will weaken the bureau, Cordray's nomination is going nowhere.

As are American households.

A Federal Reserve report issued last month shows Americans are still struggling to regain the $16 trillion in household wealth they lost in the darkest days of the recession between 2007 and 2009. Household debt, amassed in the days of easy credit, remains at record levels. And delinquencies on home and student loans are climbing again.

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Last week, law professors and financial experts told senators that consumers' big spending days are over for the long haul. But, they said, consumers who can afford to spend are keeping their wallets closed out of fear -- fear that the financial choices they make will have some dangerous pitfall created in fine print they didn't see.

Susan Weinstock heads the Pew Charitable Trusts' safe checking project, which wants the bureau to require banks to make clearer disclosures about fees and what triggers them. In an interview, she said that as her group tested a model overdraft fee disclosure form, researchers were surprised to find that so many people in their 20s were aware that overdraft fees could make an overdraft of just a few dollars morph into a debt of hundreds or even thousands of dollars.

"They all knew about it," Weinstock said, "because they'd almost all been burned."

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Read the full column, Congress Fiddles While Anger at Wall Street Burns on the Plain Dealer's Web site.

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