The Little-Guy Agenda

The Obama administration came into this summer with a sweeping plan for financial regulation--its proposals for how to prevent another meltdown after the mortgage crisis and the wave of bank failures that led up to President Obama's inauguration and continued to dominate discussion during his first months in office.

Obama and Treasury Secretary Tim Geithner rolled out a package of proposals that included the creation of a Consumer Financial Protection Agency, regulation of derivatives, and an answer to "too big to fail"--setting up government regulators as a stopgap against gigantic banks taking on too much risks.


Those proposals are making their way through Congress, as the House Financial Services Committee passed Consumer Financial Protection Agency and credit rating agency reform bills earlier this month, and Senate Banking Committee Chairman Chris Dodd (D-CT) is planning to roll all the proposals into one package.

But Democrats have tacked a few more items onto that agenda in the past month, taking up consumer-protection issues designed to protect the little guy from the towering world of business, lending, and finance.

Here's a rundown of what Democrats are working on:

- Moving up the date of credit card reform enactment. President Obama signed a credit card reform bill in May with much fanfare, but the new rules companies won't take effect until January 22--leaving credit card companies with ample time to squeeze their customers. The House Financial Services Committee has approved a bill to move the enactment date up to December 1. A similar bill has been proposed in the Senate by Sen. Mark Udall (D-CO)

- Overdraft fees. Excessive overdraft fees have also become a focus, as the House Financial Services Committee held a hearing Friday on Rep. Carolyn Maloney's (D-NY) Overdraft Protection Act of 2009, while Dodd has submitted a similar bill. The legislation would limit the number of overdraft fees banks could charge per month and per year, and it would give customers the option of paying for overdraft coverage.

- Interchange fees. These are fees paid by retail vendors to credit card companies, which, consumer advocates say, pass the cost onto consumers. Credit card companies use them to finance rewards programs, and Rep. Peter Welch (D-VT) has proposed legislation to prevent interchange fees from being levied when customers make payments with cards that don't offer rewards programs. Dodd has talked about taking up the issue, and Welch's bill was the subject of a House Financial Services hearing earlier this month.

- Payday lending. Restrictions on payday loans were included in the House committee's bill to create a Consumer Financial Protection Agency earlier this month.

- Credit card interest rates. Beyond the credit card reform bill signed by Obama in May--which was a big victory for Dodd--the Banking chairman announced a bill on Monday to freeze credit card rate increases, as card companies squeeze their customers before reforms are enacted, though such a bill is not expected to have the votes to pass.

After the financial crisis, voters will look to Democrats in 2010 and 2012 and ask: what have you done to help us? It's important that Democrats have an answer, and, if the above provisions pass through Congress, they'll be part of the party's response.