U.S. PIRG Consumer Blog: Durbin introduces Professor Warren's "CPSC for financial products" idea

Lost in the shuffle of the bailout news, on Friday, Senator Dick Durbin (D-IL) filed legislation, S. 3629, to "establish a new Consumer Credit Safety Commission, to provide individual consumers of credit with better information and stronger protections, and to provide sellers of consumer credit with more regulatory certainty." More information is not yet available at Thomas.loc.gov but should be in a few days. Over at Consumer Law and Policy blog, Professor Jeff Sovern explains the concept. Here's a working link (Jeff's in his post doesn't work) to one of several available articles where Professor Elizabeth Warren, one of the nation's leading consumer credit and bankruptcy experts, explains her idea. It's a good one. If the CPSC can ban dangerous toys, shouldn't there be a companion CCSC with the power to ban dangerous financial products? From Professor Elizabeth Warren:

It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance your home with a mortgage that has the same one-in-five chance of putting your family out on the street—and the mortgage won’t even carry a disclosure of that fact. Similarly, it’s impossible for the seller to change the price on a toaster once you have purchased it. But long after the credit-card slip has been signed, your credit-card company can triple the price of the credit you used to finance your purchase, even if you meet all the credit terms. Why are consumers safe when they purchase tangible products with cash, but left at the mercy of their creditors when they sign up for routine financial products like mortgages and credit cards?