Here at Legal Blog, we have written previously about the need for an independent agency to protect consumers, injury victims, and us all from financial injury or ruin due to the worst practices of the financial industry – practices and that greatly contributed to the crash of 2008 and recession of 2009.

In fact, Washington was a-buzz with the idea just a few months ago.

Well, what do you think the chances are that we will get that new independent agency (the Consumer Financial Protection Agency – CFPA) anytime soon? Little to none.

The bill that would create the CFPA is stuck in the Senate Banking Committee and doesn’t appear to be headed anywhere in a hurry. The answer as to why lies in the Republicans’ united front in the wake of last month’s Democratic loss in Massachusetts. And the power to move the bill and protect consumers from injury and harm resides mostly with a man who claimed during the financial crisis of 2008 that we should simply let all the banks fail – Senator Richard C. Shelby (R-Ala.), the banking committee’s ranking Republican.

According to the Washington Post and other media sources, Shelby and Committee Chairman Christopher J. Dodd (D-Conn.) have been discussing a compromise that would enact some reforms without creating a new agency. But reforms are meaningless without teeth.

And the divide between consumer advocates and those that are fighting tooth and nail to maintain the status quo actually runs deeper than one election cycle and political posturing. It demonstrates a failure of our political system in the worst way: the loss of our ability to save ourselves (a loss exacerbated by last week’s Supreme Court ruling – read here).

Senator Shelby has himself recognized the need for consumer protections. According to the Post, Shelby stated last summer, “Consumers are not likely to participate in our markets . . . unless they know they are protected against fraud and unfair dealings[.]” And he is right.

Many state attorneys general have called for an independent federal agency. And these folks should know, they enforce state consumer protections laws and see first hand the injury and harm that can be inflicted by a predatory financial industry. These folks also understand the need for an independent agency that isn’t essentially run, funded, and managed by the industry insiders it seeks to corral.

When families become entangled in a web spun by some of the more dangerous financial abuses and practices, they are left more than injured – they can be financially destroyed and ruined. Parents lose their ability to provide for their children’s education, to start a new business, to make any meaningful contribution to society all because of a system that many now feel is only profitable when it engages in activities that are fraudulent and fundamentally unfair.

Yet the bill that could change this is held up in committee – why? Because, for instance, one of the provisions provided the agency with the power to require simpler products from financial firms; straight forward terms for mortgages and credit card agreements for example. This brought the critics out in full force.

What they want it seems is a bill with no teeth, no new agency, and no real mechanism of enforcing any reforms that do get enacted. The existing federal and state regulatory agencies had the power to stop the abuses of consumers that lead to the crash; they did not do so and a new agency is needed to prevent a second much worse catastrophe from taking place.

Business groups, which despite their leadership and participation in the excesses and abuses that lead to our current condition, have lined up in a hard stance against any reform that is anything but meaningless. The fact that these groups still have power in our nations capital and wield it unabashedly indicates our broken state. And because of the Republicans willingness to utilize the filibuster on any legislation at all, the fate of our financial system and essentially the stability of our society is left with a man that would have let every single financial institution in the United States fail one year ago.