By Angela Caputo
October 13, 2009
Illinois’ own Melissa Bean has become a divisive figure on Capitol
Hill these days. As the lead negotiator for the New Democrats, the
North Suburban congresswoman has become a key ally to the financial services industry as they continue to fight the creation of a Consumer Financial Protection Agency (CFPA). As we recently noted,
Bean is thought to be preparing a banking-friendly amendment that would
water down the long-overdue consumer protections being pushed by the
Obama administration. According to Reuters, she’s poised to act sooner rather than later:

A Democratic lawmaker hopes to derail congressional
efforts that would allow states to adopt stricter laws for firms
offering mortgages and other financial products, a source familiar with
the matter said on Monday.

Democratic Representative Melissa Bean could as early as
Wednesday propose an amendment to a House of Representatives bill that
would remove a provision giving states more rights over federal laws to
protect consumers from risky financial products, the source said.

While the language of Bean’s amendment has yet to be unveiled, the goal
is apparently to preempt states’ authority to set and enforce the sort
of strict rules that would protect unwitting consumers from getting
gouged by risky financial products. Among the outspoken critics of a
preemption clause is Illinois’ own Attorney General Lisa Madigan, who
has repeatedly made the case for why more robust state rules are essential to protecting consumers. The Woodstock Institute explains:

Rather than setting strong national standards which
states can build on to address local needs, this approach would
perpetuate the status quo which allowed national banks to rake in
billions in high risk loans, bait-and-switch credit card rates, and
deceptive overdraft fees––all while states were forbidden to act.

As the Sunlight Foundation points out, Bean and her colleagues on the
House Financial Services Committee haven’t been doing the bidding of
corporate interests for free. The same banks and credit card companies
whose profit margins would be protected by preemptive laws have rewarded
those committee members with some princely sums. None has benefited
more than Bean, who has so far pulled in $269,800 (43 percent of her
total campaign haul) this year from the finance, insurance and real
estate sectors.

Encouragingly, newspaper editorial boards and citizen advocates are pushing back
against Bean’s amendment even before it hits the committee. Meanwhile,
Public Citizen is ratcheting up the effort through the new Americans
for Financial Reform coalition, noting that "our representatives in
Washington have to hear from us — the people who were put at risk by
the big banks." Learn more about their campaign here.

(UPDATE): Bean’s spokesman Jonathan Lipman responded with the following statement:

"Congresswoman Bean and the New Dems have promoted strong regulatory
reform that institute tough new consumer and investor protection rules,
credit card reforms, higher capital requirements, and executive pay
reforms, all of which put mandates on these financial institutions that
they don’t like. Bean and New Dems have been focused on increasing
transparency, reducing systemic risk, and preserving the ability for
end user businesses to hedge their risk."

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