Guest Blogger Arone Silverman

Under the protection of the Consumer Product Safety Commission, consumers are legally protected from everyday products that could cause us harm. The commission’s advancements are targeted at ensuring the safety of consumers and have significantly contributed to the 30% decline in the rate of deaths and injuries associated with consumer products over the past 30 years. So, isn’t the idea of a Financial Product Safety Commission (FPSC) – given the unacceptable performance of the financial market - a no brainer?

Harvard Law Professor and Chair of the Congressional Oversight Panel (COP), Elizabeth Warren is arguing we need protection for financial products. Whether it is mortgages, credit cards or payday loans, consumers need to know they won’t get hurt if they utilize these products.

In her book, The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke, Warren explains that even with two parents working full-time jobs, the market does not allow a family to financially survive without using some type of credit. She says that lenders have deliberately built in hidden clauses to entrap families into a non-recoverable debt cycle.

The FPSC proposal – introduced in congress this past March- would collect and report data about the uses of different financial products and determine whether they are economically safe before they are marketed to the public. It would ban and restrict practices it deemed unsafe and would be completely independent from the industry.

This is part of a broader credit card reform agenda which President Obama supports. Last Friday the President met with credit card industry executives at the White House to personally instruct the companies to accept policy changes that would prohibit tricks and traps that boost profit margins but drive consumers deeper into of debt. Naturally, the financial institutions are not interested in this type of oversight.

The FPSC would be an financial agency that focuses its attention on protecting consumers. But the only way for it to become a reality is if Congress supports the bill. Click here to tell your congressional representatives that it’s time to put some tough new rules on those selling financial products!