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Press Release |
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WASHINGTON -- Following is a statement from Mary Griffin, an attorney with Consumers Union, publisher of Consumer Reports magazine, commenting on the consumer point of view about the financial modernization bill the House of Representatives passed:
"This legislation provides consumers with several victories but some setbacks. Among the victories is an important new package of consumer protections that will limit confusion and prevent deceptive practices when banks sell insurance and investment products."
"Under the bill, banks are required to tell consumers when products are not FDIC-insured or when they involve potential risk of loss. Banks would also have to separate their deposit and loan services from their sales activities so consumers know when they're dealing with the bank as bank versus the bank acting as broker or insurance agent. And, if consumers are bilked out of their savings when banks violate these rules, they can recover their losses. The bill also requires banks operating under the new financial services holding company structure to offer low-cost basic banking to give consumers access to affordable bank accounts, which is getting harder with the skyrocketing fees banks charge."
"In a stunning victory for consumers and taxpayers, the House voted to retain the long-standing barrier between banking and commerce, eliminating provisions that would permit banks to engage in risky commercial activities, protecting our taxpayer-backed banking system from being exposed to the kinds of risks that have plagued our neighbors in Asia."
"However, we are extremely disappointed that the bill continues to place consumers at risk. In a blow to the rights of states to protect their residents, the bill puts at risk a host of state consumer safeguards that protect consumers from excessive fees, like ATM surcharge prohibitions, and other unfair practices. At a time when Congress should be preserving states' ability to protect their residents, this bill opens wide the door to more preemption of important state laws."
"While the legislation falls short of addressing all of consumers' needs, Consumers Union praises the House for providing a number of important consumer protections. Although the bill remains flawed, we will work with the Senate to improve this legislation so that it provides adequate consumer protections."
