PI Original Angela Caputo Wednesday October 14th, 2009, 1:43pm

Lisa Madigan: Put Consumers Before The Banks

Yesterday we noted
that Illinois' own Melissa Bean appears poised to introduce an
amendment that would assist the banking industry by taking the teeth
out of the proposed Consumer Financial Protection Agency (CPFA). As the
lead negotiator for the New Democrats on the ...

Yesterday we noted that Illinois' own Melissa Bean appears poised to introduce an amendment that would assist the banking industry by taking the teeth out of the proposed Consumer Financial Protection Agency (CPFA). As the lead negotiator for the New Democrats on the House Financial Services Committee, Bean is attempting to preempt states' authority to set and enforce stricter protections against the risky financial products that have made the financial services sector billions. That measure could come up for a committee vote as soon as Thursday. And Illinois Attorney General Lisa Madigan is already pushing back, telling Bean and her fellow members of Congress that its time to "put the interests of our consumers before those of the banks." From a release:

“To truly protect consumers and ensure that the current economic crisis cannot happen again, the proposed federal agency must be able to coordinate enforcement efforts with state and local agencies,” said Madigan.  “It is absolutely critical that states be allowed to continue to investigate abusive practices by major players in the financial services industry, regardless of whether these institutions have a state or national charter; and to enforce our state consumer protection laws against all lenders doing business within our borders.” [...]

“Large nationally chartered institutions share significant blame for this economic crisis,” Madigan said. “And yet, it is those same financial institutions that are fighting on Capitol Hill to prevent the passage of any significant reforms. That cannot happen. Therefore, I urge the members of the Illinois Congressional delegation to put the interests of our consumers before those of the banks that led us in part to this financial crisis.”

Madigan's staff at the state's Consumer Protection Division has seen firsthand the hardship that unreasonable lenders have created through sub-prime lending and arbitrary interest rate hikes, exorbitant penalties, and hidden fees. Bean would do well to listen.

Crain's Greg Hinz has more here.

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