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City Hall: Dismissing Opponents As Ignorant Or Wrong In Campaign Approaches, Dinallo To Unveil Consumer and Financial Protection Agenda
July 29, 2010
By Edward-Isaac Dovere
Eric Dinallo is not impressed with the talking points about things like Rockefeller reform and tax rates which his four Democratic opponents have so far largely been relying on to define themselves in the attorney general race.
“They’re either being disingenuous intentionally with what the office can do or they don’t know what the office can do,” Dinallo said Wednesday evening. “And either answer should equally disturb the voters of New York.”
With the release of his new Consumer and Financial Protection agenda on Thursday, Dinallo is hoping both for kudos of his own and to achieve the larger goal of reorienting the race around issues he believes are more in line with what the attorney general can actually affect.
(Nassau County District Attorney Kathleen Rice released her own Wall Street agenda touching on several of the same general ideas on Tuesday.)
Dinallo’s new plan runs from large-scale financial fraud prosecutions to forcing transparency in bank and ATM fees. Public pension fund investments and combating fraud in the deregulated electricity market are included as well.
Dinallo called the plan an extension of his vision of the office’s using the notoreity developed under Eliot Spitzer and Andrew Cuomo to bring more results for average New Yorkers.
“This is something that will define my office if I become attorney general,” Dinallo said, adding that he believes his approach would expand on “the traditions that were started under [former Attorneys General Louis] Lefkowitz and [Bob] Abrams of consumer protection being the core value of the office. Now there is such strength and prominence there, that things they would have had to take care of with lawsuits could now be resolved with a phone call.”
Of particular importance to Dinallo is ensuring that some authority exists to regulate all the new financial products that have been created recently.
“Wall Street knows that some of these products fall between a clear regulatory assignment,” Dinallo said. “I think that you see the potential for everyone feeling like it’s not their assignment—so I want to take different parts of the office and say, ‘I don’t really care where you’re pigeonholing it, but I want to make sure that we’re protecting people on the investments and their holdings.’”
Like when Spitzer stepped into the breach following the SEC’s retreat during the Bush years, Dinallo wants the New York attorney general to once again pick up the slack left by the federal government, which seems not to be including many of these new financial products in the purview of the Consumer Financial Protection Bureau currently being discussed.
As an example of what happens otherwise, Dinallo cited credit default swaps, the Wall Street trading innovation that, due to confusion over whether they counted as insurance, gambling, futures or something else “slid through every regulatory tackle to the goal line of imploding our financial system.”
Dinallo’s plan also includes the creation of a new consumer financial products unit within the attorney general’s office to unify enforcement and prosecution efforts across bureaus. He says this is not meant to limit action on Wall Street, just to limit action that takes advantage of consumers.
“I don’t want to send the signal that all this stuff is bad,” he said, “but it’s not clear who the regulators are, and I want to make sure that nothing can fall through the cracks.”
Dinallo tied the new consumer agenda to a longstanding proposal to put an assistant attorney general in each of the state’s 62 counties. Their focus, he said, would in part be enhancing financial literacy among average consumers, which he said was “reaching a civil rights-level of protection.”
According to a draft copy of the plan provided to City Hall, the unit’s focus would be payday lending, predatory lending, online financial scams, false advertising and unsuitability in insurance product sales, auto dealer scams, debt consolidation and foreclosure revenue scams, real estate finance fraud, unscrupulous debt collection and retail credit scams. The plan notes that elderly, minority and low-income New Yorkers are often targeted in these scams.
As for his primary opponents, who are spending their time on the trail talking about issues that Dinallo insists he knows from experience have little to do with the office, Dinallo said he could not know whether they were speaking about these things out of ignorance or deliberately misrepresenting things to voters.
If any of the other Democrats do really believe that they will come into an office that does much on criminal prosecutions or introducing program bills, Dinallo said, they are in for a rude awakening.
“I think they’ll be disappointed by a lack of effectiveness,” Dinallo said.
So rather than following their lead, Dinallo said he plans to use his time on the trail continuing to press the issues the office actually has sway over even if that means fewer soundbites.
“Clearly some of the statements are popular, in that you’re promising wonderful things to people, but I feel it would be irresponsible not to speak up,” Dinallo said. “If I go down swinging, at least you can say, ‘This guy was principled.’”
