Does Sen. Dick Durbin have Elizabeth Warren on payroll? In the span of a week, the majority whip introduced a bill that would cap annual interest rates for consumer credit at 36 percent and agreed to sponsor legislation that would cap interest rates on credit cards at 15 percent. Now, the AP reports that Durbin plans to beef up usury laws through the creation of a new federal agency:
Lawmakers proposed Tuesday to create a new government agency that could stop lenders from offering mortgages and other financial products deemed unsafe for consumers.
Supporters said the legislation’s broader goal is to apply the same type of consumer protections in the financial sector that exist for other products such as children’s toys and pharmaceuticals.
“We don’t say ‘buyer beware’ when people are buying prescription drugs, or when they’re concerned about lead paint in toys,” said Sen. Richard Durbin, D-Ill, sponsor of the bill. “But when Americans purchase financial products … they often have little idea what those products … contain and whether they’re good for their families.”
Creating a Financial Product Safety Commission is an utterly sensible idea and one Warren -- now the chair of the Congressional TARP oversight panel -- has advocated for years.
As it stands now, consumer protection responsibilities are spread among 10 different financial regulatory agencies, one reason why bureaucrats missed the warning signs of the subprime mortgage crisis and why consumers aren’t protected from the intentionally complicated stipulations attached to mortgages, credit cards, and other financial tools. “Consumers can enter the market to buy physical products confident that they won’t be tricked into buying exploding toasters and other unreasonably dangerous products,” Warren wrote in Democracy 18 months ago. “Consumers entering the market to buy financial products should enjoy the same protection.”
As we wrote earlier this week, Durbin is emerging as the Senate’s anti-usury leader. And it couldn’t come at a better time.
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