Obama: Lobby ‘Army’ Aims to Thwart Financial Reform

President Obama lashed out at bank lobbyists and their political allies for last-minute, well-financed attempts to thwart financial system oversight reform.

A primary target of that opposition is a consumer protection bureau that would serve as central overseer of credit cards, mortgages, payday loans and other lending products.

“… I won’t accept any attempts to undermine the independence of this agency,” Obama said in his weekly radio address. “And I won’t accept efforts to create loopholes for the most egregious abusers of consumers, from payday lenders to auto finance companies to credit card companies.”

Obama briefly put aside talk of the pivotal healthcare reform vote to focus on his next big agenda item – an independent agency to protect consumers; strict oversight of the biggest financial institutions; and curbs on speculative derivatives trading.

All three components are part of the reform bill introduced by Senate Banking Committee Chairman Christopher Dodd last week, and scheduled for debate over the next few days, with scores of amendments already proposed by both sides.

Obama used his strongest language to describe the efforts of bank lobbyists in pressuring Republican leaders to block or water down financial reform.

Without naming the person, the President said the “Republican leader in the House reportedly met with a top executive of one of America’s largest banks and made thwarting reform a key part of his party’s pitch for campaign contributions.” The comment drew a denial from a spokesperson for House Republican Leader John Boehner.

Obama also said “the allies of banks and consumer finance companies” launched a multimillion-dollar ad campaign to fight the reform. 

“You might call this ‘air support’ for the army of lobbyists already arm twisting members of the committee to reject these reforms and block this consumer agency,” the President said.

Under Dodd’s current oversight plan, the Bureau of Consumer Financial Protection, housed within the Federal Reserve, would be able to autonomously write rules for consumer protections, covering banks and non-banks, affecting virtually all mortgage-related and other loan products.

The banking industry and business groups oppose what they say is the agency’s far-reaching authority. They say that such a centralized entity would hurt small business access to credit; reduce consumer choices and drive up the cost of loan products by imposing restrictions or standardizing financial offerings.