Federal consumer agency advances

Illinois Attorney General Lisa Madigan and other officials praised the House Committee on Financial Services Thursday for approving the creation of President Obama's federal consumer agency.

The new Consumer Financial Protection Agency, H.R. 3126, will oversee loans, mortgages, credit card and other financial products to help protect consumers and to help avoid further collapse of the economy, they said. The bill was approved 39-29.

Besides monitoring the marketplace, the agency will have enforcement authority and the power to levy fines or penalties. It also will establish guidelines for companies to make clear and fair disclosures to consumers.

"Financial reform is about restoring responsibility and accountability to our financial system," Madigan, an Obama supporter, said during a conference call with reporters. "And, it is about making sure that our financial system serves the interests of hardworking families and individuals, not just those of the big banks."

The committee nod on Thursday is part of the process to create the agency, which could combine seven federal groups under one roof. Republican detractors have expressed concerns about the costs of creating a new agency, and the additional bureaucracy it represents.

Last month, meetings were held in Palatine, Aurora and elsewhere nationwide regarding the agency. State and local officials and consumer groups have clashed with business chambers over the necessity of the new group.

Chambers believe it's just another regulatory arm and another addition to a growing bureaucracy. Consumer groups believe the new agency could provide stronger protections nationwide for those who seek mortgages and other loans, such as high-interest payday loans and certain credit cards.