7 steps toward reform

Consumers Union, the nonprofit publisher of Consumer Reports, believes federal and state governments need to take the following steps on behalf of consumers:

1. Protect retirement.

Congress should not privatize Social Security but work to ensure that the system remains public and solvent. Congress should ensure that the Pension Benefit Guaranty Corp. is well managed and well capitalized. Consumers need strong, effective, and vigorously enforced rules for all financial advisers. Investors need accurate, complete, and understandable information about investment risks.

2. Reform health care.

People must be guaranteed lifelong access to comprehensive, quality health care like that available to Congress, regardless of medical history or job status. Options should include insurance through their employer and a public insurance plan. Congress should establish a sliding scale so everyone pays for coverage based on their ability to do so. Barriers to coverage, such as exclusions for pre-existing conditions, must be banned, and health providers should compete based on effectiveness, quality, and price. Costs must be cut by reducing medical errors, researching and using drugs and treatments that work best, and eliminating inefficiencies and waste in the way care is delivered.

3. Curb abusive credit-card practices.

Many financial institutions that will benefit from the federal bailout have engaged in abusive credit-card lending practices. The Federal Reserve Board and Congress have the power to and must rein in abuses. Go to www.creditcardreform.org/learn.html.

4. Enact mortgage reform.

Those who arrange or make loans should have a fiduciary duty to put the interests of borrowers first and provide only suitable financial products. It should be illegal to offer a loan to someone with no demonstrated ability to repay it at its peak interest rate. Congress should end practices such as steep interest rate increases after the money is borrowed. Loan pricing must be simplified and made clear to borrowers. And if something goes wrong with a loan, everyone who got a fee or holds a share of it should be accountable.

5. Reduce foreclosures.

Foreclosures hurt the families who lose their homes and all homeowners by driving down housing values. Lenders are benefiting from the bailout; federal officials should require them to modify loans for homeowners at risk of foreclosure. Modifications must be systematic and must be pursued instead of foreclosures. Moreover, Congress should empower bankruptcy judges to revise individual loans where appropriate.

6. Regulate.

Consumers need effective regulation of financial-services products, including an agency independent of the banks to protect consumers. The new administration must put a stop to "wait and see" conduct by federal regulatory agencies. Congress and federal banking agencies must also restore the ability of states to develop and enforce consumer protection standards in financial services. And the global coordination of financial services enforcement must result in the selection of the highest consumer protection standards, not the weakest ones.

7. Protect the taxpayer.

Taxpayer money from the bailout shouldn't be used by companies to support anticonsumer practices, lobbying, or excessive salaries.