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Press Release October 9, 1998 |
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WASHINGTON - Following is a statement from Consumers Union, publisher of Consumer Reports magazine reacting to the demise of the Financial Services Modernization Bill (H.R. 10) in the U.S. Senate:
It is surprising the financial services modernization bill got this far, considering the various industry and regulatory turf battles that have blocked action for many years. After peeling away the industry giveaways and regulatory handouts here, this bill has an important nugget for people on Main Street: bipartisan support exists for public action to protect consumers from the excesses of a deregulated banking industry.
As the financial services industry lumbers into the new world of mega-money centers and one-stop shopping, consumers need protection from unscrupulous and shady salespeople who misrepresent the terms of insurance or investment products. Similarly, as banks begin to expand their sales of securities, there is recognition they must be accountable to the same rules that apply to brokerage houses.
The House of Representatives is also now on record in support for basic banking, signaling that relief may soon be in sight for the millions of households who are trapped in checking accounts where it is impossible to avoid steep fees. With banks enjoying record earnings from fees and consumers being asked to absorb more risk as banks expand their activities, the hour when lawmakers require banks to provide low-cost checking accounts may soon be near.
Since the time has run out for this Congress to enact consumer protections, it is incumbent upon the Clinton Administration to begin exercising clear and strong leadership on consumer financial services issues. The Clinton Administration must wake up to consumers' concerns that these mega-mergers, like the Travelers-Citicorp deal, will further strain their already squeezed-pocketbooks. To date, such leadership has been absent and we think it is time for the Administration to take the reins and act to assure average consumers on Main Street -- not just traders on Wall Street - get a break from Washington, D.C.
