It seems that both Denver and Washington, D.C. have taken up the call for financial reform. In my opinion, which is based on 40+ years in the industry, neither is going to address the problem.
In Washington the two proposals are create a consumer protection agency and make shareholders vote on executive compensation. Both sound good on the surface, but when one looks at the detail they look a bit weak.
If large corporations were owned by lots and lots of individuals, the vote on executive compensation might actually reduce the disparity between the top earners and the bottom earners in this country. But large corporations aren’t owned by lots and lots of ordinary individuals. They are owned by extremely wealthy individuals who run other large corporations and/or mutual funds or other institutional investors who are operated by other extremely wealthy individuals. I don’t expect the echo chamber to hear any of the pleas of the small guy.
A consumer protection agency, with real teeth, is a better idea. How viable it would be may be another story. I think back to the laws that said that consumer contracts had to be written in plain English so that the average individual could understand what they were signing. What happened was longer and longer contracts that only loan closers ever actually read. I don’t know where to place the blame for that one. I don’t know if there ever could be an agency able to protect people from signing documents that they don’t understand.
In Denver legislators were trying to put a cap on interest charged by payday lenders. But the Democrats, who were sponsoring the bill couldn’t get enough people in the room to ensure a vote, so the bill was tabled for lack of interest. I’d like to see a national usury law, and have told Colorado’s Senators and our Representative that. It is the lack of a national usury law that allowed interest rates on credit cards to get so high. Credit card companies argued in federal court that they were chartered nationally, and thus were not under the jurisdiction of state laws, then high-tailed it to states without usury laws.
In Washington the two proposals are create a consumer protection agency and make shareholders vote on executive compensation. Both sound good on the surface, but when one looks at the detail they look a bit weak.
If large corporations were owned by lots and lots of individuals, the vote on executive compensation might actually reduce the disparity between the top earners and the bottom earners in this country. But large corporations aren’t owned by lots and lots of ordinary individuals. They are owned by extremely wealthy individuals who run other large corporations and/or mutual funds or other institutional investors who are operated by other extremely wealthy individuals. I don’t expect the echo chamber to hear any of the pleas of the small guy.
A consumer protection agency, with real teeth, is a better idea. How viable it would be may be another story. I think back to the laws that said that consumer contracts had to be written in plain English so that the average individual could understand what they were signing. What happened was longer and longer contracts that only loan closers ever actually read. I don’t know where to place the blame for that one. I don’t know if there ever could be an agency able to protect people from signing documents that they don’t understand.
In Denver legislators were trying to put a cap on interest charged by payday lenders. But the Democrats, who were sponsoring the bill couldn’t get enough people in the room to ensure a vote, so the bill was tabled for lack of interest. I’d like to see a national usury law, and have told Colorado’s Senators and our Representative that. It is the lack of a national usury law that allowed interest rates on credit cards to get so high. Credit card companies argued in federal court that they were chartered nationally, and thus were not under the jurisdiction of state laws, then high-tailed it to states without usury laws.
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