Madigan takes aim at Bean on financial watchdog law

Illinois Attorney General Lisa Madigan hoped to put heat on a fellow Democrat Wednesday to back off a push to change a consumer protection measure championed by President Barack Obama.

But U.S. Rep. Melissa Bean, a Barrington Democrat, is set to introduce the measure today to modify the proposed Consumer Financial Protection Agency.

Following a related Wednesday morning news conference, Madigan issued a statement urging House members from Illinois "to put the interests of our consumers before those of the banks that led us in part to this financial crisis."

Bean, however, argues her plan is actually better for consumers.

"Let's create a clear and simple universal standard," said Bean, who co-chairs a House task force putting the financial industry reform legislation together.

At issue is whether the new financial watchdog agency will have final say on regulations for banks, including credit and lending practices. The current proposal would allow the federal government to set a floor on regulations while for the first time giving states the chance to add stronger ones locally, likely creating a hodgepodge of standards across the country. The plan would also give attorneys general like Madigan broader power to enforce the law.

Madigan wants the language to stay.

But Bean says allowing states to create their own, tougher standards will limit choices for consumers and increase costs because banks will have to manage different rules and services in different states. She also wants to keep the current laws that let an attorney general start an investigation, but then turn it over to federal authorities.

Bean says she has long advocated for uniform federal laws in the financial and insurance industry.

"This is a consistent principal of working toward uniformity," she said.

Bean has been intensely involved in the crafting of the financial reform legislation now working its way through the top industry committee in the House.

The three-term lawmaker is also part of a centrist Democratic coalition whose members view themselves as more business-friendly than other elements of the party. That position has worked well for Bean in the 8th District, which stretches from north suburban Cook County into northern Lake and McHenry counties. The seat was previously held by Republican Phil Crane for 36 years.

Also on the key financial House committee are Rep. Judy Biggert of Hinsdale, Rep. Bill Foster of Batavia and Rep. Don Manzullo of Rockford. Some in the GOP suburban caucus have voiced opposition to the consumer protection watchdog agency as a whole.