By Jessica Holzer Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- Financial industry and other business groups are considering running "Harry and Louise"-style ads to sway public opinion against the Obama administration's proposed Consumer Financial Products Agency.
The original Harry and Louise television spot, financed by the insurance industry, helped defeat the Clinton health plan in the early 1990s. In the commercial, a middle-class married couple laments they are worse off under the new health-care regime, describing it as a bureaucratic nightmare.
The spot struck a chord with voters. Financial industry lobbyists hope the same strategy will turn middle America away from the consumer agency, which is gaining momentum in Washington. The agency would have oversight over all credit products, including mortgages, credit cards and auto loans.
"The CFPA will result in higher costs of goods and services, decreased availability of products, and more confusion for consumers," Financial Services Roundtable Senior Vice President Scott Talbott contended. "There is a more effective way to strengthen the system."
Four public relations firms, including Powell Tate and Direct Impact, pitched their ideas for the television spot at a meeting this week, according to people who were there. Representatives from the National Association of Realtors, the American Bankers Association, the Mortgage Bankers Association and the Financial Services Roundtable attended the meeting, which was organized by the American Financial Services Association.
A spokeswoman for Direct Impact declined comment. Representatives for Powell Tate couldn't be immediately reached for comment.
"We're not considering running ads against anything as much as trying to ... ensure we don't move forward, in the haste to do something, with the wrong type of approach," AFSA Executive Vice President Bill Himpler, who is spearheading the effort, said.
The trade groups haven't formed a formal coalition to fight the proposal nor made a decision to run any ads. "By no means does our attendance mean that we are in agreement" with the ads, Realtors spokeswoman Mary Trupo said. The Realtors' group hasn't taken a stance yet on the proposed agency, she said.
However, there is pressure to settle on a strategy quickly as House Financial Services Chairman Barney Frank, D-Mass., plans to pass legislation creating the new agency through his panel later this month.
Trade groups have met informally over the past couple weeks to talk strategy. There's an effort to broaden the coalition beyond the financial-services industry by recruiting groups such as the National Association of Home Builders and the National Auto Dealers Association for example, according to people familiar with the matter.
"We're having conversations about how do we help the average consumer understand how badly they would be affected by this proposal," American Bankers Association Executive Director Wayne Abernathy said. He said he wasn't privy to the discussions on running ads.
The proposed consumer protection agency would have the power to require firms to offer "plain vanilla" products, with simple terms and disclosures alongside more complex products.
The agency would be able to issue new regulations protecting consumers and to ban certain practices. And it would have power to examine institutions for compliance with its rules and to hand down orders, fines and penalties to rule-breakers.
It is unclear how the new agency would be funded, though it's likely the industry would have to cover at least a portion of its costs. The banking industry warns that separating consumer protection from prudential oversight of institutions could damage the financial system.
Such concerns "really are overblown," said Treasury's Deputy Assistant Secretary for Consumer Protection Eric Stein, who helped design the administration's proposal.
Stein also disputed the new agency would constrict consumer choices. "The administration would like to tilt the playing field a little bit toward simple products," he said. "There's not desire to force people to take loans they don't want or to ban products altogether."
- Jessica Holzer, Dow Jones Newswires; 202-862-9228; jessica.holzer@dowjones.com
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Publié le 02 Juillet 2009 Copyright © 2009 Dowjones