WASHINGTON — President Obama tried to build momentum for the centerpiece of his overhaul of financial regulations -- a new agency to protect consumers -- by aiming to derail the strong opposition from business groups that threatens its passage by Congress.
In some of his sharpest comments on the issue, Obama slammed banks and the U.S. Chamber of Commerce for trying to block, or at least water down, the proposed Consumer Financial Protection Agency as it heads toward a vote in a House committee next week.
"They're doing what they always do, descending on Congress, using every bit of influence they have to maintain the status quo that has maximized 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," Obama said Friday at a White House gathering of key lawmakers, administration officials and other supporters.
The consumer agency has wide support among Democrats, including Rep. Barney Frank of Massachusetts. Frank is chairman of the House Financial Services Committee, which takes up the measure next week. Many Republicans, bank regulators and businesses oppose all or key parts of the agency. Among other things, they say the measure would bring unnecessary layers of regulation and the intrusion of government in business operations.
To emphasize that the proposed agency was designed to protect average Americans in the often-confusing financial marketplace, Obama met before the event with five people who had lost money to large bank overdraft fees, high-interest payday loans, expensive adjustable-rate mortgages and other products.
"I was caught in a debt-trap of predatory lending. . . . We need greater consumer protection from creditors' loans," said Patricia Nelson, 64, a retired nurse from Waukesha, Wis., who introduced the president at the event.
Nelson said she borrowed $550 from a payday lender in 2007 to help her move closer to her family because of a health issue. She made monthly payments for nearly two years, paying $2,700 in interest with none of it going toward the principal. Obama said the new agency would help protect consumers from predatory lenders by taking over consumer protection functions from seven regulatory agencies, where the tasks typically have not been high priorities. The bill would focus enforcement in one place with a single mission.
