Bill: U.S. Agency to Police All Lenders' Mortgages

Two high-ranking Senate Democrats have introduced a bill to create a consumer credit protection agency that could police mortgage products offered by any lender — including federally chartered banks. The legislation sponsored by Sens. Richard Durbin (Ill.) and Charles Schumer (N.Y) would create a Financial Product Safety Commission to ensure mortgages and other consumer financial products are safe and not abusive or predatory. The new commission would ensure "companies are held accountable when they abuse, deceive or take advantage of the consumer," Sen. Durbin said. "The time is right for a financial services regulator with a consumer focus," Sen. Schumer said. Consumer, community, labor and civil rights groups are supporting the bill, which they claim will not only protect consumers but the entire economy. "It is now widely accepted that the current international economic crisis was triggered by the failure of federal regulators to stop abusive lending, particularly in the housing sector," according to a joint letter to the sponsors. But many industry groups are wary of the senators' approach. "We think it makes sense to keep the concepts of safety and soundness combined with consumer protection with the current regulators," said Scott Talbott, chief lobbyist for the Financial Services Roundtable.