OPINION: Toasters and consumer protection

U.S. Senator (D-Mass.)

Have you ever thought about how you don’t need to be an appliance expert to know which toasters are safe to buy?

That’s thanks to government regulations.

And in the same vein, you shouldn’t need to be a banking expert to know which banks are safe to put your money in.

Let me back up a bit and explain why I’m comparing banks to toasters.

When I was a young mom, toaster ovens had an on-off switch, and that was it. They could too easily start fires and burn down families’ houses. Then along came a federal agency, the Consumer Product Safety Commission, which stepped in and said manufacturers had to add features like a timer and automatic shut-off. This simple change made toasters a whole lot safer.

Thirty years later, while working on an article about how the government could protect consumers from predatory financial companies, I thought about those old toaster ovens.

By then, it was all but impossible to buy a toaster that had a one-in-five chance of exploding. A government agency monitored toasters for basic safety, just like the government kept lead paint out of children’s toys and rat poison out of medicine.

But it was possible to refinance a home with a mortgage that had a one-in-five chance of costing a family their home and putting them out on the street. In fact, it wasn’t just possible: Those mortgages were wreaking havoc all over the country.

I had a plan for how we could change the rules with a structural fix: A new government agency whose sole mission was to look out for consumers. They could serve as the watchdog to make sure that financial companies followed some clear, commonsense rules. No tricks hidden in the fine print, no traps buried in complex legalese.

Then the crash of 2008 happened. Millions of people lost their jobs, their homes, and their savings. And maybe one of the most galling parts was that the Wall Street megabanks whose recklessness helped crash the economy weren’t ashamed. Nope. Just the opposite.

The plan didn’t seem so pie-in-the-sky anymore. So we got organized and started fighting for the Consumer Financial Protection Bureau (CFPB).

Of course, the giant financial institutions were dead set against an agency whose job was to get the tricks and traps out of the fine print of financial products. They spent millions lobbying against financial reform and the new consumer agency.

It was David-versus-Goliath all the way. But we won.

The CFPB transformed the market for financial services by placing new rules on mortgages, credit cards, checking accounts, prepaid cards, and payday loans to clean up some of the most predatory practices and knock bad actors out of the industry altogether.

And since it’s been created, this little agency has returned about $16 billion to American consumers who’ve been cheated.

The CFPB is just one example of how government regulations are — in fact — a good thing. For toasters, and for financial institutions like Silicon Valley Bank handling over $50 billion in assets.

Now, of course special interests keep trying to roll back regulations and strangle the CFPB. Of course they don’t want anyone looking over their shoulder as they cheat people. Of course they’d rather have free rein to boost their profits by putting our whole economy at risk.

But they don’t get the last word. I’m fighting back for the protections that Americans need — and I’m grateful you’re in this fight by my side.

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