Financial industry contributes $270,000 to Bean campaign as Illinois Dem seeks to weaken new financial services watchdog

Written by Dory Rand and Tom Feltner on October 13, 2009 - 2:00am

As the debate on financial services reform continues in Washington, a new report finds that key decision makers in Congress have received sizable donations from the very industry they are seeking to reform.

In Illinois, Representative Melissa Bean (D-8), a member of the Financial Services Committee where these reforms are under consideration, received  43 percent of her 2009 campaign contributions (or nearly $270,000) from financial services, insurance, or real estate companies. 

While certainly not the top recipient of industry largesse (one committee member received nearly 71 percent of his total 2009 campaign contributions from the industry), Rep. Bean has announced a proposal to weaken the new consumer protection agency proposed by the Obama administration and introduced by the committee chairman, Rep. Barney Frank.  The proposal, discussed at a September 30 committee hearing, would allow big national banks to override consumer protection established at the state level.  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.

In February, Rep. Bean co-chaired the New Dem Financial Services Task Force, which drafted 21 principles for stable and transparent financial system.  However, this proposal outlines a clear retreat from at least one of those principles, calling for an aggressive multi-tiered strategy that prevents unnecessary foreclosures.  If passed, this exemption from state laws could prohibit state foreclosure prevention efforts that do just that, such as a recent Illinois law that extended the foreclosure process to give borrowers time to exhaust loan modification efforts.

Woodstock Institute is part of Americans for Financial Reform, a national group of over 200 organizations that opposes efforts to weaken the Consumer Financial Protection Agency  and is working to support passage of policies that will effectively protect American consumers and communities.  Illinois advocates interested in weighing in on these issues should contact Jen de Kock at Citizen Action-Illinois at jen@citizenaction-il.org for sample letters, talking points and phone numbers.