In Defense of Consumer Protection

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Consumer Advocacy and Business Interests Are Not Mutually Exclusive

Every day, American consumers, military and civilian alike, are being viciously attacked by those who would take advantage of our lack of financial skills, scam us and steal our identities. Every day, we learn of new abuses by financial institutions (loan modification programs that deceive and destroy, foreclosure mills that have shifted into overdrive again and fee frenzy part two), the breach of the week (SONY, Epsilon, Citibank, Bank of America, the IMF and the U.S. Senate to name a few) and the seeming powerlessness of government to do anything about it (the HAMP Program has been a disaster, the economy is sliding south again and hackers are running wild).

Collective greed and stupidity begat years of irresponsible borrowing, lending and spending; which begat overly aggressive remedial institutional response such as mind-numbing ill-conceived foreclosures, frenzied short sales, indiscriminate account closings and ubiquitous credit line cramdowns; which begat the extinction of millions of small, medium and large economic enterprises deemed small enough to fail; which begat shrinking 401ks, collapsing consumer confidence and economic ruination for millions of Americans; which begat the terrifyingly ballooning government deficit; which could beget the S&P downgrade of America's credit standing; which will beget the Chinese and our other fair-weather friends fleeing our shores in search of the next best investment.

That said, why do conservatives believe that a strong consumer advocacy and enforcement agency by definition is antithetical to business? It doesn't have to be a zero-sum game. Doesn't a level playing field help to eliminate adverse relationships between consumers and business? Isn't it better when legitimate businesses are fairly competing against other legitimate businesses for the favor of the consumer?

Shouldn't government and business be promoting financial literacy? Financial illiteracy leads to impulsive and uninformed decisions. Clueless borrowers are a danger to themselves and the businesses with which they do business.

[Related article: More Roadblocks for New Consumer Protection Agency]

Should it not be the policy of this nation to promote a stable housing environment where we strive to keep consumers in their homes and find a way for lenders and institutional investors to mitigate and perhaps fully recover potential losses incurred by irresponsibility on all sides of the selling, lending and borrowing equation?

Wholesale foreclosures that don't follow the rules of financial engagement foment borrower resistance, generate their own brand of moral hazard, and create an environment of such hostility that trust can never be regained. That doesn't bode well for business.

Foreclosing on the homes of active duty personnel in violation of federal law, or properties where no mortgage ever existed cannot possibly lead to investor or borrower confidence.

If we believe the concept that "financial readiness" leads to "mission readiness," how can we allow our soldiers and their families to be defenseless in the face of financial predators and identity thieves who hover around their bases, attempt to beguile them online and work assiduously to lure them into a company store environment of never-ending debt.

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