Thursday, October 8, 2009

Worst Case Scenario?

Mother Jones published feature by David Corn on Harvard Professor Elizabeth Warren. The article dubs her the "bank buster."

Warren is pushing a proposal to create a Financial Product Safety Commission to protect consumers from abusive lenders. Mortgages and credit cards, she wrote in a 2007 journal article about the proposal, "should be subject to the same routine safety screening that now governs the sale of every toaster, washing machine, and child's car seat."

The response from the banking industry has been predictable. They don't like the idea. An industry lobbyist, Bill Himpler, says Warren's commission would "take us essentially back to the 1970s, where we had... one-third the consumer credit available that we have now."

Would having less consumer credit be a terrible thing? If I understand this treat correctly, Himpler is saying, "if you don't allow us to take advantage of a few customers now, you'll hinder our ability to allow people to get in over their heads with debt, and no one wants that."