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For immediate release – Tuesday, October 13, 2009.
Contact Bill Roach 515-281-5536, bill.roach@iowa.gov.

Vilsack and Miller Call for Strong State Role
in Proposed Consumer Legislation

States Must Play a Role in Enforcement for President’s Proposal to Work, They Say.

Des Moines. Secretary of Agriculture Tom Vilsack, Iowa Attorney General Tom Miller and leaders of AARP today urged Congress not to strip state enforcement from President Obama’s proposed Consumer Financial Protection Agency.

U.S. Secretary of Agriculture, Tom Vilsack said: “In the three months from October to December 2008, American families lost $5.1 trillion in wealth and today, they are still paying the price for weak regulation and financial instability. The Consumer Financial Protection Agency will ensure that future mistakes by a few do not cause harm to so many. We owe it to the American people to ensure consumer protection regulations are written fairly and enforced vigorously and I am pleased to see Congress making progress on critical legislation to provide economic stability for American families and for the economy as a whole.”

“This is the most important consumer protection legislative issue of our day,” Attorney General Tom Miller said. “Preserving a proper role for the states is crucial if consumers are going to be protected from a repeat of the banking and mortgage abuses we’ve seen in recent years.”

“The beauty of the President’s proposal is that this agency will have only one mission - to protect consumers, “ Miller said. “Under the current, broken system, consumer protection is spread across many agencies all of which also have other jobs to perform. The President is saying that it needs to be someone’s full time job to be looking out for consumers.”

President Obama’s proposal for a Consumer Financial Protection Agency includes a strong role for the states to aid in enforcement to protect consumers. Congressional consideration of the bill begins this week but Congress is under heavy lobbying pressure from large bank interests to “preempt” or limit state enforcement powers. [Click here for information packet provided by the White House.]

“The big national banks — many of which had to be bailed out by taxpayers because of their involvement in the national mortgage meltdown — now want to be freed from effective consumer protection policing by the states,” said Miller.

“The big banks say they don’t want ‘too many cops on the beat’, Miller said, “but if there had been more cops on the beat, we might have been able to reduce some of the economic and personal devastation of the last couple of years.”

“Amendments to weaken the role of the states risk allowing a repeat of our recent disaster where the federal government pushed the states aside, and then failed to act in the public interest itself,” Miller said. “That system failed, and we had to spend hundreds of billions in taxpayer money to bail out the banks. Now the banks are fighting to make sure that failed system does not change.”

Miller and Vilsack made their remarks at a news briefing Tuesday along with representatives of AARP Iowa. Bruce Koeppl, AARP State Director, said, “AARP knows far too well that our members and older Americans in general have had their retirement savings decimated by this economic crisis. Creating an agency to protect their financial needs is a step in the right direction, but it would be wrong to diminish strong state consumer protections in the process. States can catch problems early, before they become nationwide.”

Miller noted that states are often in a better position than the federal government to see consumer protection needs and regulatory gaps. “The states are closer to the people and better able to see emerging trends,” he said. “When we are excluded from enforcement against national banks, we can help only citizens who happen to do business with a state chartered lender – even if national banks are engaging in the exact same practice. All consumers should be treated the same regardless of how their bank is chartered.”

END

(Attached materials provided by the White House.)