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Consumers need a watchdog of credit

A century ago, all with bathroom and a number of chemicals for the
mixture of sand and sell drugs right fantastic course. The "reformers"
Rake professionals benefit from the sale of bad products, because
customers were poorly equipped for the difference between effective and
ineffective treatments. In the decades following the establishment of
the Food & Drug Administration and some basic rules on security and
publicity. Companies to encourage more investment in research and
development of safe and effective medicines. The elimination of bad
solutions for the creation of a property.

The application of this basic economic principle for the sale of
financial products, President Obama recently the creation of a Financial
Protection Agency (CFPA), an agency of product safety and the promotion
of competition and economic growth . We are quite familiar with the
financial sector, bad products are harmful and "innovation" in recent
years: Lenders offer fixed rate mortgages and adjustable loans were
Klang, through the promotion of exotic products must be compatible with
taxes and complex pricing "explain" in small incomprehensible. Millions
of consumers, the market rate has allowed the sub-prime mortgage credit,
because they are not able to compare products and real choice.

This information between lenders and borrowers in the credit market for
consumption. The average credit card dizzyingand is 30 pages, on one
side and the other half in the early 1980s. Lender promote an interest
rate at the forefront of their direct mail envelopes, in-depth valuable
information in the document. Given the law and consumer confusion can
not really compare the offers of clear eyes or decisions to all credits.

Big banks short transmission control, consumer credit is broken.
Effective competition, nature, the decisions and get the best products
to rise to the top has disappeared. And as we know only too well, a
break not only consumers. Reckless lending and borrowing threatened the
profitability of some of the largest banks and caused a severe economic
downturn.

The office of President would be clear about the risks and costs for
everything from mortgage lending and payday for credit cards and bank
fees. There were also financial statements produced by the type of
mortgage, sayregardless what type of credit issued. The amendment to
plug the hole in the current system, the credit card issuer to their
regulatory authorities and businesses nonbank mortgage loans without
effective monitoring.

The CFPA would force the administrative burden of processing fragmented,
cumbersome and complex rules in seven federal agencies in a single set
of intelligent rules. It would also cut the burden of regulation the
prior model of plain-vanilla contracts which are read in less than three
minutesa legal safe harbor, which have to pay the legions of lawyers to
the respect of the maze law. The lender would rate, credit, sanctions
and appointments. But consumers would be able, a half-dozen easy to read
the contracts on the table and the card that best suits their needs.
Banks and other lenders in productsas complex or dangerous as the risks
for customers to understand without a lawyer.

Some large banks have to fight against the proposed agency. The American
Bankers Association. is the new agency, the freedom of choice of
consumers and undermine innovation. But what kind of innovation,
consumers can not distinguish the good products Bador the market with
their preferences? No agency can, or should, in personal responsibility.
To request a credit card, is an invaluable shopping, the consequences,
as if everyone who buys a home size or budget Busting a new car. But
most consumers, responsiblywould to action in the context of a market,
that the costs of credit. And for the vast majority of financial
institutions, that companies prefer to win, in a better service and
prices to hide revenue Enhancers "in small print, the CFPA, the path to
a stable, efficient and competitive financial system .

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