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Congressman Rush Holt Touts Proposed Consumer-Credit Safeguards During South River Visit

Home News Tribune / — Monday, July 12, 2010


Ed Trygar is hoping new federal legislation, if approved, will give him some relief from the high fees he is charged when handling debit-card transactions.

"In the last couple of years, more and more people want to use their debit cards for everything," said the owner of Trygar's Hardware & Locksmith, a family-owned hardware business on Ferry Street. "We're a small business, so we don't pass the fees we are charged along, but it does add to our bottom line business expenses."

U.S. Rep. Rush Holt, D-12th, visited the store Monday and spoke about the Restoring American Financial Stability Act of 2010, which calls for major reforms in the financial industry.

The legislation, which was recently approved by the U.S. House of Representatives and is awaiting Senate approval, calls for creation of a new consumer financial protection agency designed to protect Americans against abusive lending practices. The legislation would set stringent regulations on the financial industry and prevent taxpayer-funded bailouts of financial firms.

If approved, the legislation also would require the Federal Reserve to issue rules to ensure that fees charged to merchants by credit-card companies for debit-card transactions are reasonable and proportional to the cost of processing those transactions, officials said.

That policy would help small businesses and, in turn, help the customer, Holt said. Whether its a large or small charge, it costs the credit-card companies the same to process the transactions, but they don't always treat the merchants the same way, Holt said.

"It's the small merchants and the customers, who really end up stuck," he said.

A major component of the pending legislation calls for creation of an agency that "will speak for the consumer, look after the consumer's interest and regulate on behalf of the consumer," said Holt, a major supporter of the legislation.

"There will be a consolidation of regulatory agencies, which will make a difference," he said. "Once it's up and operating, it is going to be able to step in quickly and protect consumers and enforce regulations and laws."

The bureau also will have a hot line for Americans to call to report unfair practices.

Holt said the pending legislation would also require that derivatives, which are currently unregulated, be traded openly.

"Shareholders will have a say on salaries," he said. "Hedge-fund managers and private equity advisors will have to register now and will have regulators looking over their shoulders for the first time."

The legislation, if approved, will help put consumers back in control and hold Wall Street accountable, said Stefanie Rubin of New Jersey Citizen Action.

"Consumers will be empowered to make more sound financial decisions for themselves," Rubin said. "We're hoping this new bill is going to give consumers the confidence that they need to start spending money again and feel there is a new cop on the beat looking out for their best interest."

Anita Thomas, who is owner of the AM Thomas & Associates consulting firm, executive director of Carolyn Dorfman Dance Company and a member of the NJ Main Street Alliance, said she supports the new legislation.

"I think it's important that small businesses and consumers have an agency that will protect them from predatory lending practices," she said. "Banks need to be partners with the consumer, who is giving them deposits and helping them be financially viable. As a taxpayer, I should never have to bail out another business. We bailed out the savings and loans and the banks are even bigger. It shouldn't be happening."

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