An Oregon Perspective: Protecting Consumers through Policy and Financial Literacy

This week is National Consumer Protection Week – a perfect opportunity for families to evaluate how they make their financial decisions amidst the current economic downturn. 

Under the current system, it’s easy for many Americans to unknowingly get into financial trouble through unfair policies buried in fine print.  For example, right now credit card companies can increase rates on cardholders in good standing for any reason and charge multiple fees for late payments.  Companies often use gimmicks like free t-shirts at sporting events to market credit cards towards young people who may not be aware of the risks and responsibilities that come with having a credit card. 

And there’s no greater example of the danger complicated fine print can pose to both a family’s finances and the nation’s economy than the mortgage crisis.  More Americans lost their homes to foreclosure in 2008 than in any year since the Great Depression and Americans are currently losing their homes at a rate of almost 50,000 per week.  One of the major reasons we are in this sinking mortgage situation is that a huge number of families who actually qualified for prime loans – more than half at the peak of the subprime boom – were instead advised to take out high-cost, high-risk loans.

These kinds of abuses are the result when we gut oversight and accountability of financial industries.  We need to reverse years of sweetheart deals for Wall Street and level the playing field for consumers.  To help consumers navigate credit card pitfalls, I have joined with Senator Dodd of Connecticut to introduce The Credit Card Accountability, Responsibility and Disclosure Act.  This bill puts an end to the abusive credit practices that have buried Americans in debt and made it nearly impossible for many to pay off their credit cards.  

On the mortgage side, we should ban payments to mortgage brokers who steer people into more expensive loans and allow bankruptcy judges to modify mortgage terms just as they do for vacation homes and yachts.  We should also help responsible families in need of short-term assistance to replace failing mortgages with stable loans that help them stay in their homes.  In the coming months, I’ll be working with the Obama Administration to implement these and other consumer protection provisions as they move forward with the Homeowner Affordability and Stability Plan announced by the President two weeks ago.

While Congress works to end the abuses, you can help protect yourself as well.  Remember, if an offer sounds too good to be true, it probably is.  If you’re trying to modify your mortgage, beware of scam artists offering to negotiate a “deal” to save your house if you pay a fee first.   Make sure you get promises in writing, make mortgage payments directly to your lender, and get professional financial advice before even considering signing over the deed to your home.  For legitimate help with mortgage trouble, you can contact the Home Ownership Preservation Foundation at

There must be significant policy changes at the federal level to assist consumers, but the best way to protect yourself and your family against financial hazards and fraud is to be well informed.   For more information on credit cards, loans, and mortgages, visit  If you are a parent to high school or college students, take a few minutes to talk with them about the purpose of credit and the risks that come along with it.    If we all take the time to focus on financial literacy and pass along that information to our children, our families and our economy will be stronger for it.

For more information, please take a look at these helpful financial resources available for free from the Federal Trade Commission.

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