An email from Senator Debbie Stabenow on her support of the Consumer Financial Protection Bureau

Dear Morris,


Thank you for contacting me about your support for the Consumer Financial Protection Bureau. I share your views.

The CFPB was created by the Dodd-Frank Wall Street Reform Act to give consumers the information they need when making financial decisions and to promote fairness and transparency for mortgages, credit cards, and other consumer financial products and services. Our shared desire to protect working families is why I strongly supported and am involved with the implementation of Wall Street Reform.

A number of bills have been introduced to weaken or eliminate the CFPB’s ability to regulate consumer financial products and services. While it is important that Congress exercises appropriate oversight over the CFPB, I will continue to ensure that the agency can accomplish its mission of representing the needs of consumers, families, and small businesses.

Thank you again for contacting me. Please continue to keep me informed about issues of concern to you and your family.

Sincerely,

 

Debbie Stabenow
United States Senator

Thank you, Senator Stabenow.

A shift in social attitudes

The campaign from the right tried to make the 2012 Presidential election a repudiation of President Obama’s economy.  The message was; there isn’t enough job growth, the economy is sluggish and the deficit is too high.  Many voters did buy into this message.  The electorate clearly moved to the right in this election. 

Most Americas it appears are fiscal conservatives.  In the past, when the economy was slow or sluggish, the incumbent faced certain defeat.  Votes may want their religion and their guns, but what they really want is a job and a future for their children.  There is nothing wrong with that.  After all, the thinking goes, without a healthy economy it may all be for naught.

With the blind confidence that the right’s strategy to focus on the economy was the correct one, many thought the voters wouldn’t notice the other ideas that the right would bring quietly with them to their elected posts.  But, those Republicans who could not be controlled by their party came out of the woodwork.  (Maybe a better word than “woodwork” might be “cave”.)  Most of the ideas from the most extreme Republicans were talking points from a century ago.  Birth control, rape, abortion, race, the rejection of gay rights, the role of government (or lack thereof) and many other old, tired ideas.  While the generation that came from those times may have been happy to talk about them, those from the last two generations rolled their eyes.

With an economy portrayed as being bad and an electorate that shifted to the right (actually, more like a shift to the center) should have been enough.  But, the social positions that the right holds so dearly brought it all back to focus.  It turned enough voters back in support of Obama. 

This represents a fundamental change in the social attitudes of the country, as slight as it may be.  In this election cyle, a president with a liberal social agenda won in what was portrayed as a sluggish economy.  Perhaps as many as four states (three for sure) supported marriage equity.  The voters want the financial reforms that came out of the crisis to stay in place.  They supported the continuation of the health care reform.  The right to choose will be left in place.  Gay rights will be supported by more and more people.  Also, many other ideas from the last two generations will now become accepted as part of a new life of freedom and security in the country.

If the Republicans continue with their current track of holding on to old social ideas they will soon be obscure.  But, if they change they may have a chance.  That of course, in the irony of the times, is actually what they are fighting against.

Small business owners say it isn't regulations that's bad

What regulations are holding back job creation?  Don’t you wonder what regulations are preventing businesses from hiring people? 

All the Republican candidates are talking about regulations.  They say that the reason businesses aren’t hiring people is because of regulations.

With all this talk, changing regulations must be a top priority for businesses in America.  John Arensmeyer, founder and CEO of Small Business Majority says it isn’t so.

“Despite the heated rhetoric, regulations simply aren’t small businesses’ top concern,” Arensmeyer said on the release of a survey of small business owners.  "Small businesses can be the jobs engine we need to jumpstart the economy, but not if legislators are focusing on something that isn't their top problem. Policymakers should listen to what real small businesses are saying and act accordingly."

The survey of small business owners across the country was sponsored by Arensmeyer’s group, Main Street Alliance and The American Sustainable Business Council.  The three groups are focused on small business in America.

In the survey, only 14% thought that regulations were in the way of their overall operations.  Most believe that without fair regulations creating a level playing field, small business won’t be able to compete with large corporations.

“From our perspective, the effort to kill regulations is big business’ way of rigging the game in their favor,” said Frank Knapp, Jr., Vice Chair of the American Sustainable Business Council and president and CEO of the South Carolina Small Business Chamber of Commerce.

What is the number one job killer according to small businesses?  24% said moving jobs overseas.  Regulations are fifth on the list with only 10% saying regulations stopped them from creating jobs.

Here are a few more things that small businesses are concerned about:

78% believe that to protect small businesses there needs to be standards.

93% said they can live with fair regulations

80% supported product safety standards and disclosure and regulation of toxic materials.

The business people on the front lines that are struggling the most in this recession are saying that regulations are not the biggest problem.  So, as voters, let’s ask politicians to talk about what really matters, getting people back to work.

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End banks that are too big to fail

Jon Huntsman, one of the many Republican presidential candidates, wants to put an end to banks that are too big to fail. His plan would not allow banks to grow beyond a predetermined percent of the economy. The real solution would be to keep banks in the community and service their own mortgages, loans and investments.

Communities operate best when the stakeholders have reasonable control over the events and issues that affect their personal and community lives. The institutions in the community that assists its citizens need to be small and local so that they can be responsive to the needs of the community. When they become too large, the interest of the institution is not tied to the community.

National and international banks are the biggest offenders. Their interests are not aligned with the interest of individual communities and the needs of its citizens. Decisions by the owners of the large banks are not made on a community by community basis. They are made in support of the corporation. Rather than provide the services that individual communities need, they force communities to confirm to their standards.

One of the issues this affects is mortgages. The amount of mortgages a bank can provide is limited. In order to be covered by the FDIC, a bank must maintain a set amount of its demand deposits on hand. If a bank wants to provide more mortgages than is allowed under law, some of its mortgages must be sold off, usually to Wall Street. This allows the banks to go well beyond their limits on lending money. They can make more profit, which is good for the bank, but not always what is best for the community.

When mortgages are serviced by the bank in the community, it is much easier for someone to approach the bank to discuss issues. Those that own and manage the bank are in their offices every day and are approachable. They care because the failure of a single mortgage means a loss to the bank and its standing in the community will be affected. If the mortgage has been sold off to Wall Street, the local bank has no say in the management of the mortgage. Also, the profit the bank makes from the loan has already been realized.

As a secondary benefit, less risky mortgages will not be made. If the bank knows that they will be servicing the mortgage, it will not want to have the expense of collecting the money. If risky mortgages are quickly packaged and sold off, the bank will be more willing to make those risky loans, knowing they won’t have to service it.

Both issues mentioned in the preceding two paragraphs caused a lot of problems over the last few years. One of the problems that mortgage owners have experienced is that the bank that services the loan would not work with them on finding solutions to avoid default. Personnel at the banks could not be contacted, would not return inquiries and generally were unresponsive to the needs of the homeowners. Also, without question, some of the mortgages should not have been made. Those risky loans were one of the reasons for the near collapse of the mortgage business.

Banks need to be community oriented and service the mortgages they provide. This insures that they will be more responsive to the community. When there is continuing personal contact between all the parties in any business relationship, the outcome is much more likely to be positive.

Note: Thank you to my daughter Lauren Hagerman for her insightful and supportive assistance for this blog post.

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Regulations protect people and environments

The regulations that business operates under is going to be an issue in the upcoming presidential election. Those candidates that are running on the right are saying that we have too many regulations on business and that the result is a loss of jobs.

If jobs are lost who could be against dumping the regulations?

Yes, perhaps, there are too many regulations. But, most regulations are in place for a reason. They protect people and the environment. Without these regulations, we would have to rely on corporations, whose sole legal goal is to create profit, to do the right thing. Many corporations say that their best practices meet or exceed the regulations.

As an example of corporations following their own best practices, there is Shell Oil that has operations in the Niger Delta, Africa. The corporation has established best practices between itself and NNPC, the national oil company of Nigeria. Those practices are to protect the environment, workers and the people living in the delta.

But, there is a serious problem in Africa, where Shell said they followed their best practices and said that the area was “clean”. As reported in The Economist, August 13th-19th, 2011, a United Nations report states that there is a “thick, black carpet of crude” in the Ogoniland. This spill has been estimated to be larger than the 1989 Exxon Valdez disaster in Alaska and covers about 10 square miles. This is the result of an oil spill that Shell first claimed was caused by theft and sabotage, but now has admitted was caused by equipment failure. It appears that their best practices didn’t anticipate the equipment failure and that Shell could blame it on other causes.

Residents of the area are drinking water with 900 times as much benzene, a carcinogen, then is deemed safe by the World Health Organization. The report goes on to say that it could take 30 years and a billion dollars for Shell to clean up an area. This report is published 20 years after Shell left Ogoniland.

Every time a corporation or an industry is threatened with regulations they claim that their best practices will be better and that there will be loss of jobs. But, in thousands of case in our own country and around the world, it isn’t the case.

So, should we skip the regulations so that Shell can hire a few more people? It is the lack of regulations and reliance on corporation’s best practices that have polluted the Ogoniland, a faraway place that is rarely seen by the eyes of American voters.

Let’s keep the regulations that protect people and environments.

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