Our Atlanta consumer lawyers often have to inform wronged consumers that they have no remedy under the law. We see this very often in the investment, credit, and banking areas. Legislation that, if enacted, will provide greater protection to investors was approved by a committee of the U.S. House of Representatives last week.
At the same time, the full House approved a bill to accelerate restrictions on abusive practices by credit card companies that had been signed into law last May. That law was scheduled to take effect in February, but many banks and credit card companies are taking advantage of the delay by raising rates and fees before the practices are unlawful. The House voted to make the new law effective next month, but Senate approval is not certain.
The bill is part of an effort to overhaul the financial regulatory system in response to the crisis in the financial markets. It would provide new powers and increased resources to the Securities and Exchange Commission. Importantly, it would give the SEC authority to end mandatory arbitration agreements that investors must sign with their brokers and financial advisers. It would establish a whistle-blower program for Wall Street employees designed to ferret out corruption in the financial sector. Similar provisions have been very successful in other areas such as health care and government contracting fraud.
However, the House committee also approved a very controversial measure which would permanently exempt companies worth less than $75 million from the auditing provisions of the Sarbanes-Oxley Act. This provision had been actively supported by the White House. Supporters have argued that the stringent auditing provisions were overly burdensome for small companies.
Consumer groups were obviously upset that this controversial provision had been added to legislation that is designed to help protect investors.
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