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US: Obama underscores need for stronger consumer protection

20 Jun 2009 8:15 PM

WASHINGTON, June 20 AFP - US President Barack Obama has urged stronger consumer protection in financial markets, vowing to defend the interest of those "who play by the rules."

"We are going to promote markets that work for those who play by the rules," the president said in his weekly radio address on Saturday. "We're going to stand up for a system in which fair dealing and honest competition are the only way to win."

On Wednesday, Obama proposed what he said was the most sweeping overhaul of the financial regulatory system since reforms implemented after the 1930s Great Depression.

The plan included the creation of a Consumer Financial Protection Agency to shield Americans from the extremes of credit, savings and mortgage markets.

In his radio address, the president said the new agency will have the power to set tough new rules so that companies compete by offering innovative products that consumers actually want and understand.

He complained that today, consumers signing up for a mortgage, student loan or credit card have to deal with voluminous and incomprehensible contracts that often contain important terms hidden in fine print.

"Those ridiculous contracts - pages of fine print that no-one can figure out - will be a thing of the past," Obama promised. "You'll be able to compare products - with descriptions in plain language - to see what is best for you. The most unfair practices will be banned. The rules will be enforced."

He acknowledged that special interest groups supporting big business were already mobilising against change, but he vowed not to back down.

"The most important thing we can do to put this era of irresponsibility in the past is to take responsibility now," the president noted. "That is why my administration will accept no less than real and lasting change to the way business is done - on Wall Street and in Washington."