Progress Illinois

Earlier this week, we highlighted efforts by the Woodstock Institute to drum up support for the creation of an independent Financial Product Safety Commission tasked with regulating unsafe financial products -- an idea championed by Sen. Dick Durbin. The banking industry is up in arms about the proposed legislation, which they falsely argue would restrict what types of mortgages, loans, or economic services Americans "can and can't buy." And they are being aided in their efforts by Illinois' own Rep. Judy Biggert and her fellow Republicans on the House Financial Services Committee, whose alternative to the Democratic plan would keep consumer protection under the jurisdiction of the current regulatory bodies. The Wonk Room's Pat Garafalo offers his critique:

If the financial meltdown taught us anything, it’s that existing bank regulators are simply too far removed from the action on the ground to adequately police consumers and giant, complicated financial institutions simultaneously (which is also why individual states need to be allowed to go beyond federal regulation). Consolidation of the bank regulators is fine, but it won’t make them focus any more of their time on consumers. A new agency, focused solely on consumer protection, will hopefully address that imbalance. The banks, though, want to preserve the status quo and the Republicans have thus far been willing accomplices to achieving that goal.

Using footage from a July 14 hearing, the Wonk Room team also compiled the following clip, which illustrates how Biggert's language closely mirrors that of the banking industry officials testifying in favor of the status quo: