Why Are the Big Banks Still So Bad?
Yesterday, Elizabeth Warren and the new Consumer Financial Protection Bureau convened their first roundtable of religious leaders at the White House. Why does this matter? Because there is a lot that still needs to change about the behavior of our financial institutions, and this bureau has the opportunity to make some big strides in the right direction.
When I was at the World Economic Forum in Davos, Switzerland the other week, I kept hearing business leaders talking about the struggle to actually change business behavior. Why is it so hard to change some of these practices?
If there is a lot of money to be made in confusing, misleading, or tricking consumers, it becomes very hard not to do it. If you can hide some of the real costs for whatever it is you are selling, you can pull business away from a competitor who doesn't hide those costs.
This is why we need some basic rules of the road for our economy and some fundamental protections for America's families from dishonest and unfair marketing practices -- which is what Elizabeth Warren believes is the mission of the CFPB. As a Christian, I believe in sin. I believe people are responsible for their personal behavior. But I also believe we should make sure that there aren't stumbling blocks put in people's way. We shouldn't put people into unnecessary temptation. And we certainly shouldn't manipulate and cheat them.
We discussed today how our values should affect our economic decisions -- the things that are allowed and the things that aren't, the things that are legal or illegal, what should be discouraged and encouraged. "You simply can't do the work we are trying to do without working with the faith community," Warren told the 30 or so religious leaders gathered. "We are building from the inside, but we need to hear from faith leaders who are on the ground about what else we can do and what is going to help people the most."
Pastors and faith leaders on the ground in cities across the country see the everyday effects that payday lenders or credit cards with hidden fees and skyrocketing rates can have on the poor and middle class alike. Dr. Shaun Casey, Professor of Christian Ethics at Wesley Theological Seminary, noted at the meeting, "Clergy are the first responders for financial emergencies of individuals in their communities." He suggested hearings around the country where people could simply tell their stories. We heard some pastors tell some of those heart-breaking stories today at the White House -- stories the nation needs to hear.
Plans for the new agency focus in on some simple things that could really help consumers, such as credit card contracts that are easy to understand and have all their costs displayed right up front. But tricking people and hiding costs can make a lot of people a lot of money. There were five lobbyists from the financial industry for every member of Congress fighting or trying to water down financial reform this past spring. So implementing reform will be a fight every step of the way.
Elizabeth Warren called the CFPB "the people's agency." This would be new in the government of recent years, and something that is desperately needed by ordinary families in America who now don't have much of a chance against the power and tactics of the big banks. Rev. Dr. Carletta Allen, Pastor of Locust United Methodist Church and Clergy Co-Chair of PATH, a Howard County, Maryland IAF affiliate, called everyone gathered to responsibility: "If this is 'the people's agency' -- 'the people' are going to need to hold it accountable."
This will be a fight, but one the faith community needs to make. Many people in that room yesterday have dedicated their lives to defending the poor against predators. They have worked to educate their communities and call the government to do its part. The fact that Elizabeth Warren, the former Methodist Sunday School teacher and Harvard Law Professor who has made family financial protection and well-being the mission of her life, was appointed to this position is promising, and she asked for help yesterday from the faith community. All of our faith traditions have been warning about and fighting against lenders who take advantage of the poor and the desperate for thousands of years. We haven't given up the fight yet, and we aren't about to now. It would we delightful to get some help from the government.
Jim Wallis is the author of Rediscovering Values: On Wall Street, Main Street, and Your Street -- A Moral Compass for the New Economy, and CEO of Sojourners. He blogs at www.godspolitics.com. Follow Jim on Twitter @JimWallis.