Small Businesses Need Strong Consumer Protections Too

By Jon Bartholomew of Portland, Oregon. Jon is a policy advocate for OSPIRG.

Currently in Congress, both houses are in conference committee hashing out what the final version of Wall Street reform will look like. On one hand, we can say that no matter what, this is going to be the most comprehensive reform of the financial system in America since the Great Depression. But on the other hand, that is because since that time, most of what has happened has been a gradual weakening of regulations.

Much of the media has framed this issue as one of business vs. consumers. But it’s really about a small number of specific large financial firms vs. everyone else. While those big banks have a lot of political power because of their financial investments in D.C. (campaign contributions and lobbying spending), the voice of the rest of us needs to be heard loud and clear. A large sector of concerned citizens is the small business community. While many assume they would be supportive of big business because they are businesses, you know what happens when you assume.

Small business stands to gain significantly from strong consumer protections in the Wall Street reform package, so several signed the letter below urging Congress to stand firm and ensure that what comes out of conference committee will be strong. Indeed, most of Oregon’s Congressional delegation has been excellent on the Wall Street reform bills. Senator Merkley has led the way in calling for adoption of the Volcker Rule and banning “steering fees” for mortgages. But we need them all to stand firm in the face of strong lobbying by Wall Street to weaken consumer protections.

After the fold: An open letter from Oregon small business owners regarding the need for strong consumer protections in pending Wall Street reform legislation.

To the Oregon Congressional Delegation:

Two things you need to know: First, small businesses are an important economic engine in Oregon. Second, banks, especially the big banks that contributed so heavily to the recent economic meltdown, often treat small businesses as badly as they treat consumers. That hurts us and it hurts the economy.

Now that the U.S. House and Senate have passed versions of Wall Street reform, lobbyists for the big banks have turned their sights on the conference committee that will reconcile the differences between the two bills. It is their last chance to weaken the bill. We urge you, our congressional representatives, to fight back against bank efforts to weaken the bill and to fight for the strong, independent Consumer Financial Protection Agency included in both the House and Senate passed bills.

Strong consumer protections will help small businesses survive the down economy and speed the recovery. We have experienced first-hand the tricks and traps set by the nation’s largest banks for consumers because like many small business owners, we often rely on personal financial products (such as personal credit cards) to finance our businesses. The consumer protection agency will provide small business owners with much-needed safeguards against potentially dangerous financial products. Also, new safeguards will protect our customers so they can avoid the toxic financial products that triggered the financial crisis, destroying millions of jobs, siphoning away disposable income, and decimating our sales and customer base.

We hear a great deal from politicians about support for small business. The best way to support us and businesses like ours across Oregon is to adopt new rules that foster a stable economy. We simply ask that you give us a chance to thrive or fail based on the quality of products rather than the economic manipulations of the marketplace by bankers who live and work a thousand miles away.

Our communities count on us for goods and services and jobs that keep our economy healthy. We promise to do our part if you do yours. We urge you to stand firmly in support of a strong bill including an independent consumer protection agency with the ability to stand up to the excesses of Wall Street.

Sincerely,

Steve Hanrahan, Mirador Community Store Jennifer Cook, Living Right Jonathan Bebe, A Balanced Evolution Rod Terry, Designer William B. Gordon, Jr., Gordon Enterprises Steven McGrath, President, Sustainable Solutions Unlimited David Brown, Brown Inc. Sattie Clark, Eleek Inc. Zach Newman, Realtor, Oregon First Carla Kay Hodges Drain, Bohemian Vintage