Consumer advocates and public officials gathered at the State House on Monday to lobby for federal legislation that would place new rules on banks and Wall Street investment firms and set up a consumer protection agency.

Representatives of RI PIRG, Ocean State Action, and Rhode Island LISC joined Attorney General Patrick Lynch and Representative David Segal at the rally.

"Predatory lending through hidden fees and opaque terms produced the toxic assets that got us into this mess," said Chris Bell, federal field associate with the Rhode Island Public Interest Research Group, a non-profit, consumer advocacy group in the state. "Strong consumer protections are a critical piece of comprehensive financial reform that will finally hold Wall Street accountable."

The U.S.House has approved an overhaul of the financial system. A different bill is pending in the U.S. Senate.

Dodd legislation has its flaws, but another bailout it isn't

You’ve heard it said one can judge the quality of a person by the quality of their enemies. In Washington, that is even truer with the quality of legislation.

The banking and lending accountability package introduced by Sen. Chris Dodd, D-Conn., is a classic example. It is an imperfect bill to be sure. The bill needs to be strengthened in areas including creating a Consumer Financial Protection Agency that would protect Americans from deceptive credit cards and abusive mortgage loans and would be fully independent, rather than creating one that will be subject to veto power from the same bank regulators whose cozy relationships with Wall Street allowed the subprime mortgage crisis to develop.

But even if the bill has flaws from a consumer perspective, consider this: The big banks are engaged in a multi-million-dollar campaign calling for opposition to Sen. Dodd’s financial reform package on the grounds that it is a giveaway to the big banks. This goes well beyond typical Washington “spin.”

The state health insurance commissioner has slashed proposed premiums, keeping rate increases in the single digits -- in some cases just barely -- for people covered through their employers.

Commissioner Christopher F. Koller, who on Thursday announced rate increases ranging from 6 percent to 9.9 percent, estimated that his reductions would save employers and subscribers about $30 million in health insurance premiums. . .

Peter Asen, executive director of the advocacy group Ocean State Action, called the rate increases "unsustainable" and said that only federal health care reform can bring the problem under control.

Read entire article here.

The health-care overhaul proposal now before Congress represents our best attempt to fix a longstanding paradox in U.S. health care. We have the best medical care in the world and yet a badly deficient health-care system. We lead the world in spending for health but lag on results as basic as life expectancy. We have instant access to world-class physicians, diagnostic laboratories and imaging, sophisticated medications and surgical tools, day or night, but over 45 million uninsured Americans cannot get basic medications and preventive testing.

Where I work, in the emergency room, I am able to quickly deploy thousands of dollars worth of resources to fight any life threat and for any patient. Everyone gets the best care we have to offer regardless of his or her ability to pay. No one will die in any emergency department because of insufficient funds. We know that this is how it should be. Though Americans disagree over the details of health-care delivery, the conviction to aid each other in our most vulnerable moments unifies this country.

Read full letter here.

The reckless behavior of big banks on Wall Street, credit card companies and mortgage lenders caused a financial crisis that cost Americans millions of lost jobs, billions in taxpayer-funded bailouts and trillions of lost retirement savings.

It’s outrageous that after taking billions of our tax dollars in bailout money, the big banks are back to business as usual, taking billions in profits and spending hundreds of millions to pay lobbyists to fight against reforms that would protect us from their abuses in the future. We need financial reform that will hold corporations, big banks and individuals accountable, crack down on reckless behavior on Wall Street, rein in excessive bonuses and pay for executives, protect consumers from the exorbitant fees and deceptive practices of credit card companies, increase stability for small businesses, and prevent predatory lenders and borrowers from entering into loans they know cannot be paid back.

By demanding accountability from those who helped cause the financial crisis, we can make financial dealings safer and more transparent for American consumers, investors and small-businesspeople who play by the rules, and prevent future bailouts and job losses. Most importantly, we can lay the foundation for a financial system that promotes stability and long-term economic growth, rather than greed and short-term profits.

Thankfully, opponents of reform do not have an ally in U.S. Sen. Jack Reed, D-R.I., who is using his important seat on the Senate Banking Committee to push for the creation of a consumer financial-protection agency and strong derivatives reform.

Derivatives are unregulated investments whose value derives from an underlying asset. They now represent literally hundreds of trillions of dollars in investment activity, or 10 times as much as investment in stocks. Credit default swaps, one form of derivatives, were responsible for the collapse of the insurance giant AIG, which sold many such swaps that guaranteed to pay out insurance to many different investors if their investments in mortgages went bad, and then had to be bailed out to the tune of $134 billion when all of the mortgages did go bad.

Massive speculation in the derivatives market for commodities has contributed to the sharply fluctuating prices of oil and grains – making life very difficult for small producers like farmers and oil-heat dealers, and also contributing to price increases for all consumers.

The biggest financial institutions are fighting against the idea of requiring all derivatives to go through a clearinghouse to make sure the buyers and sellers really have the necessary capital for doing a particular trade, and alternately are lobbying to be able to run those clearinghouses if they are established. Most significantly, the banks are fighting against a requirement that derivatives be traded on an exchange.

In the stock exchange a buyer knows what price all the other buyers are paying. But in the derivatives market, the buyer – which can include pension funds and other institutional investors, as well as farmers, oil-heat dealers and others who want to make sure they can offer their customers a fixed price or get a fixed price for their product – has no ability to know whether they are getting a better or worse deal than everyone else. All of the information – and all of the power – rests with the derivatives dealers, who are mostly the very largest banks. Exchange trading will mean that the big banks no longer have a lock on all information about derivatives.

Thus the most effective means of ensuring that the derivatives markets operate fairly is reform that is as comprehensive as possible, with no loopholes and strong requirements for clearing and exchange trading of all derivatives. It is the only way that we will not leave ourselves vulnerable to yet another bailout.

It is important that Rhode Islanders encourage Sen. Reed to push for the strongest possible derivatives reform. There is no doubt that he, like every other member of Congress on a committee with oversight of the financial industry, is hearing quite a bit from the country’s largest banks.

Peter Asen is the executive director of Ocean State Action.