Two Congressmen have introduced legislation to create an official citizen watchdog group for banks and thrifts.
The Financial Consumer Association would be patterned after the citizen utility boards that represents consumers in some states.
Bankers oppose the bill. They say it would load another regulatory expense on an industry already saddled with paying billions a year to comply with regulations.
The bill, which was introduced by Rep. Joseph Kennedy 2d, D-Mass., and Rep. Lane Evans, D-Ill., envisions the group as representing consumers at congressional hearings and before the regulatory agencies.
The new panel would also answer consumers' questions about bank products and charges.
Industry Would Have to Help
Banks and thrifts would be forced to help the organization with its fund-raising by sending membership solicitations in monthly statements.
Consumer organizations are pushing hard for the measure.
The Financial Consumer Association would "help balance the marketplace," said Michelle Meier, a lobbyist for Consumers Union.
Diane Casey, executive director of the Independent Bankers Association of America, said that the financial industry is already "balanced" by the Federal Reserve's 30-member Consumer Advisory Council.
And Fritz Elmendorf, vice president of communications for the Consumers Bankers Association, said that the financial industry had a good record on providing education material.
"It is not proper to set up that king of regulatory role in the free market," he said.
But Sherry Ettleson, staff attorney for Public Citizen's Congress Watch, countered that "the only thing [the proposed consumer association] gives citizens is the ability to organize themselves."
Demise of Bill Forecast
Mr. Elmendorf predicted the bill will die with fanfare.
"It is going ot take a lot more than one or two congressmen" to get it going, he said.
Ms. Ettleson, however, said the bill is ripe for passage because consumers are more skeptical than ever of big business, particularly in light of the savings and loan crisis.
