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Obama or Romney: Which One is Better for Debtors

With the 2012 presidential election coming up and the choice left to either sitting President Barack Obama or Republican nominee Mitt Romney, anyone concerned about their personal finances might want to look at the positions of the two candidates and factor that into their voting strategy.

Over the past four years the Democrats, and President Obama have been pushing for more consumer protection and regulation. In his first term, Obama was able to get the Consumer Financial Protection Bureau, the brainchild of Elizabeth Warren, formed and running. Republicans opposed the bureau and claimed it would harm business and should be kicked to the curb.

Mitt Romney called it “the most powerful and unaccountable bureaucracy in the history of our nation,” referring to the unprecedented autonomy the bureau will have from meddling by Congress. – Source

In May of 2012 the Romney campaign told the Wall Street Journal that gutting the Consumer Financial Protection Bureau would be part of the Romney economic agenda.- Source. Granted, Romney’s spokesperson clarified their position by saying Romney would propose a new system of consumer financial regulation that either moves the new Consumer Financial Protection Bureau outside of the Federal Reserve or breaks up the new agency and places the powers within existing financial regulators. – Source. Still, changes to the CFPB at this point as they try to roll out protections and enforcement for consumers sure seems like a big step backwards and strips power away from consumers.

And it seems that while there have been some issues with the CFPB as they get their footing, they have done so good work so far.

For example the CFPB has:

  • been working on making student loans and college financing more transparent to help not trap students in deep debt.
  • launched a new public database of credit card complaints so people can see, in almost real time, the types of issues consumers face from credit card companies.
  • gone after creditors like Capital One for unfair and deceptive practices. The Capital One action resulted in a $140 million refund for consumers.
  • worked to help protect consumers from high risk mortgages and to make the mortgage process simpler.
  • proposed new regulations to bring greater accountability to the mortgage market.
  • started working on creating greater supervision of credit reporting and credit report accuracy.
  • begun to help protect seniors by eliminating confusion from the reverse mortgage market.
  • And it goes on…

When it comes to consumer protection it appears the decision comes down to giving more power to big business and banks under a Republican controlled government or trying to protect consumers with a Democratic controlled government.

The real question is which of the two parties will provide the fairness and balance due consumers. Is it easier to vote Democratic and push for greater protections and the continuation of the CFPB or vote Republican and fight to reduce what some feel are excessive government programs or regulation?

What do you think? Are we better off with promises that better times are ahead with business even though that most likely means less financial protection for you as an individual?

Obama or Romney: Which One is Better for Debtors
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Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Buddy H.

    Dear Steve,Regarding CFPB and what they have been doing and about to do in the future, and regardless whoever wins the election this coming November, I do hope there will be some sort of policy continuation to protect consumers interests in the long run. Afterall, the consumers, ‘the little people’, are the ones who actually drive the economy forwards, though often unfortunately we are fallen as powerless victims at the other end of the industry chains with no recourse at all.I happen to bump into the following copied article that I find interesting, of which probably you are also already aware of, and since, quote:”The CFPB says the Dodd-Frank Act, in the absence of this rule, would have prohibited upfront points and fees for most payments. The CFPB also is proposing all loan originators be such to same qualification and screening standards, all steering incentive payments to be barred and all arbitration clauses and credit insurance to be restricted. The CFPB is opening the rule up to a 60-day comment period and is proposing to adopt final rules in January [2013]“then I thought your readers might benefit to know this, and thus can cast supports in this 60-day comment period. So, please post the following article in your website. Thank you.================================================================CFPB proposes no-point, no-fee mortgages
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    August 17, 2012|Steve Goldstein, MarketWatch

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    WASHINGTON (MarketWatch) — The nation’s financial services watchdog on Friday proposed requiring lenders to make available no-fee, no-point mortgages to make it easier for prospective homeowners to comparison shop.The proposal from the Consumer Financial Protection Bureau would force lenders to make such loans available unless consumers were “unlikely” to qualify for such a loan.“These options would enable a consumer buying or refinancing a home to better compare competing offers from different creditors, better able to compare loan offers from a particular creditor, and decide whether they would receive an adequate reduction in monthly loan payments in exchange for the choice of making upfront payments,” the CFPB said in a release.It also would force lenders to offer interest rate reductions when consumers did elect to pay such upfront points or fees.

    While these points and fees come in many different names and combinations, they all should function similarly to reduce the interest rate and thus a consumer’s monthly loan payments, the CFPB said.“Consumers have a hard time comparing loans when they are dealing with a bewildering array of points and fees,” said CFPB Director Richard Cordray in a statement.The CFPB says the Dodd-Frank Act, in the absence of this rule, would have prohibited upfront points and fees for most payments.The CFPB also is proposing all loan originators be such to same qualification and screening standards, all steering incentive payments to be barred and all arbitration clauses and credit insurance to be restricted.The CFPB is opening the rule up to a 60-day comment period and is proposing to adopt final rules in January.The proposal differs from an initial outline the agency provided in May, in that the May outline would have banned origination charges that weren’t flat. The Mortgage Bankers Association last month objected to flat origination charges.The MBA also said in a comment letter that paying discount points might result in different discounts to different customers.“The effect of a discount point varies from loan-to-loan for many reasons, including the present value of the dollar; the shape of the interest rate curve and where the note rate falls on the interest rate curve (as determined in the secondary mortgage markets); the particular pool the loan is to be assigned to as well as the value and type of the loan,” the lobbying group for mortgage underwriters said.Wells Fargo (US:WFC) is the nation’s leading underwriter of residential mortgages, followed by the Chase unit of J.P. Morgan Chase(US:JPM) , U.S. Bank (US:USB) , Bank of America (US:BAC) and Quicken, according to Mortgage Daily.

  • junglegene

    Steve, You have Republicans and Democrats reversed in statement below.

     The real question is which of the two parties will provide the fairness
    and balance due consumers. Is it easier to vote Republican and push for
    greater protections and the continuation of the CFPB or vote Democratic
    and fight to reduce what some feel are excessive government programs or
    regulation

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