NEW YORK (CNNMoney.com) – President Obama on Friday made his strongest push yet for the creation of a new consumer protection agency, lashing out against those who have lobbied hard to stand in its way.
The Obama administration sent Congress its proposal for a Consumer Financial Protection Agency in late June. The proposal has been met with disdain from banks and big business.
"They're doing what they always do - descending on Congress and using every bit of influence they have to maintain a status quo that has maximized their profits at the expense of American consumers," Obama said in televised remarks made at the White House. "That's why we need a Consumer Financial Protection Agency that will stand up not for big banks and financial firms, but for hardworking Americans."
Banks succeeded last month in stripping out of the bill a provision that would have required banks and others to offer uncomplicated financial products, like easy-to-understand applications for 30-year-fixed mortgages, as alternatives to more complex ones.
The president reserved his harshest criticism for the U.S. Chamber of Commerce, which he said "is spending millions on an ad campaign to kill" the proposal. The Chamber of Commerce launched an ad campaign opposing the proposal, featuring a butcher and baker concerned about its possible impact on their businesses.
"This, of course, is completely false - and we've made clear that only businesses that offer financial services would be affected by this agency," Obama argued.
The agency would set more transparent rules for financial institutions to ensure that consumers get help in understanding the terms of their loans and agreements. But banks have opposed another regulator that some believe could threaten the soundness of financial institutions.
"We disagree that a massive new federal agency with unprecedented powers over vast segments of the business community will be good for consumers," said David Hirschmann, CEO of the U.S. Chamber Center for Capital Markets Competitiveness, in a statement. "The proposed CFPA will exacerbate the weaknesses of the current system that clearly failed, restrict access to credit and make it more costly for consumers and businesses."
Still, the White House and many in Congress are undeterred. The House Financial Services Committee is set to hold a hearing on Wednesday.