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Durbin Proposal Would Protect Consumers from Unfair Credit Practices

Press Release

Location: Chicago, IL

A single government agency would be responsible for ensuring the financial products offered to consumers are responsible, accountable, and transparent if legislation offered by U.S. Senator Dick Durbin (D-IL) becomes law. During the Senate's credit card debate this week, Durbin may offer his bill to create the Financial Product Safety Commission as an amendment.

The legislation is designed to improve the fractured oversight of the nation's financial markets, in which at least 10 federal regulators have responsibility for consumer financial products but none have consumer protection as its primary objective. In this absence of meaningful oversight, the number of excessively costly or predatory consumer financial products has exploded.

"It's time to put the needs of American families above the interests of Wall Street," Durbin said. "This new financial oversight agency would look out for consumers first, acting quickly to protect members of the public from predatory practices and ensuring that companies are held accountable when they abuse, deceive or take advantage of the consumer they claim to be helping. The current crisis has diminished consumer protections and eroded consumer confidence. It's time we reversed that trend."

The Financial Product Safety Commission, originally conceived by Elizabeth Warren, Harvard Law Professor and Chairwoman of the Congressional Oversight Board for the $700 billion Trouble Asset Relief Program, will add consumer protection to the factors lenders must consider in creating and offering financial products. It will identify the practices that undermine sound markets and put a stop to them before they again bring the entire financial market to its knees.

The Financial Product Safety Commission would:

• Reduce consumer risk in using financial products by preventing predatory or deceptive financial practices and educating consumers on the responsible use of financial products and services;

• Coordinate enforcement with the other federal and state regulators and with the private sector to establish a floor beneath which consumer financial product safety could not fall; and

• Report regularly to the public regarding the state of consumer financial product safety and recommend the steps that should be taken to improve the value of financial products for consumers.

The bill is supported by over 55 national and state organizations, including Consumer Federation of America, Center for Responsible Lending, Leadership Conference on Civil Rights, NAACP, La Raza, AFL-CIO, SEIU, National Consumer Law Center, Consumers Union, Public Citizen, and US PIRG.

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