“In America, we don’t say ‘buyer beware’ when people are buying prescription drugs or when they’re concerned about lead paint in toys,” says Majority Whip Dick Durbin (D-Ill.), a cosponsor of a bill that would create a Financial Product Safety Commission, which would oversee mortgages, credit cards, and other financial instruments.
When it comes to financial products like credit cards, insurance, loans, and bank accounts, the “product” is just a contract. And a contract is just a collection of promises that, nowadays, often hide terms that sometimes cause just as much damage as lead in toys.
This is why Obama and Congress are talking about regulation again. Because nobody knows what products they are buying. The market does not work without intelligent, rational consumers. And consumers need to be able to understand what they are getting in order to be intelligent and rational.
Regulation does not mean the end of the market; it just means the companies who want to compete in the market will have to follow a few rules. Hopefully, those rules will make it easier for consumers to make smart choices about the financial products we buy.
Financial Product Safety Commission: Dems Want Mortgages Regulated Like Toys, Drugs | Huffington Post
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