Obama Urges Creation of Agency to Regulate Financial Industry

Los Angeles Times 
October 10, 2009
Puzzanghera, Jim

Ahead of an upcoming vote on the matter, President Barack Obama on Oct. 9 blasted banks and business groups for trying to dilute or kill plans for a new consumer financial protection agency (CFPA) that would govern home loans, credit cards, banking accounts, and other products. Obama used the meeting of key legislators, administration officials, and other interests as a platform to put a face on the problem and illustrate how the new watchdog could protect average Americans. Retired Wisconsin nurse Patricia Nelson -- one of five consumers who attended the event and personally relayed their stories to the president-- recounted how a $550 payday loan she took out in 2007 cost her $2,700 in interest over a period of nearly two years, with none of the monthly payments whittling down the principal balance. "It's true that the crisis we faced was caused in part by people who took on too much debt and took out loans they couldn't afford," Obama conceded. "But my concern are the millions of Americans who behaved responsibly and yet still found themselves in jeopardy because of the predatory practices of some in the financial industry. These are folks who signed contracts they didn't always understand offered by lenders who didn't always tell the truth. They were lured in by promises of low payments and never made aware of the fine print and hidden fees."

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