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March 12, 2009

Senators Kennedy, Schumer and Durbin Introduce Financial Product Safety Commission Legislation

On March 10th, Senator Dick Durbin, with Senators Ted Kennedy and Chuck Schumer serving as co-sponsors, introduced legislation that would create a Financial Product Safety Commission. The Commission would regulate products like home mortgages, credit cards and retirement accounts. Elizabeth Warren, a consumer law expert based at Harvard, first proposed creating a Financial Product Safety Commission in Democracy: A Journal of Ideas, in our summer 2007 issue. Warren wrote:

Why not create a Financial Product Safety Commission (FPSC)? Like its counterpart for ordinary consumer products, this agency would be charged with responsibility to establish guidelines for consumer disclosure, collect and report data about the uses of different financial products, review new financial products for safety, and require modification of dangerous products before they can be marketed to the public. The agency could review mortgages, credit cards, car loans, and a number of other financial products, such as life insurance and annuity contracts. In effect, the FPSC would evaluate these products to eliminate the hidden tricks and traps that make some of them far more dangerous than others.

Read Warren’s full article here.


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