Consumer Protection

The Obama administration is actively discussing the creation of a regulatory commission that would have broad authority to protect consumers who use financial products as varied as mortgages, credit cards and mutual funds, according to several people familiar with the matter. The proposed commission would be one of the administration's most significant steps yet to overhaul the financial regulatory system.

Norman Hockett didn't realize that the small plastic rectangle that arrived in his Fresno mailbox in the fall of 1958 put him at the vanguard of the credit revolution. Fresno was the proving ground for the BankAmericard, the granddaddy of mass market credit cards, and Hockett was one of the first 65,000 people to get one. He used the new tool carefully, never failing to pay off his balance when he bought a TV or a dinner out.

There is broad agreement in Congress that government regulators failed to protect Americans from subprime mortgages and other risky credit products, but Democrats and Republicans split sharply Wednesday over creating a consumer watchdog agency to police the financial industry.

President Obama, pushing a key part of his overhaul of financial regulations, sent to Congress a draft bill that would create the Consumer Financial Protection Agency, which he said would better protect Americans from unscrupulous practices and make financial products easier to understand. Under the 152-page bill released Tuesday, the new agency would bring together what the administration called the "fragmented" system of responsibility for consumer protection.

Consumer groups petitioned the Federal Trade Commission on Thursday to require that Chrysler vehicles display stickers warning prospective buyers of liability risks. The request comes after Chrysler successfully shed its obligation for past and future product liability claims on vehicles manufactured before May 30, when most of the company's assets were sold to a new company run by the Italian automaker Fiat.

Congress gave the Federal Reserve the power to enact rules to protect consumers from unscrupulous mortgage lending in 1994. But as the years passed and risky subprime loans inflated the housing bubble, restrictions on lenders never came. It wasn't until last summer, long after the bursting bubble triggered the deep recession, that the central bank adopted rules prohibiting unfair, abusive or deceptive lending practices. The 14 years it took the Fed to act are now cited by Obama administration officials, consumer advocates and lawmakers as a key reason for scrapping a fragmented regulatory structure spread across multiple agencies and replacing it with a new Consumer Financial Protection Agency.

Gov. Arnold Schwarzenegger on Wednesday conceded that long-standing delays in disciplining errant health professionals were "absolutely unacceptable" and promised broad reforms to better protect patients from dentists, pharmacists, therapists and others accused of misconduct. "The existing model protects licensees," said Brian Stiger, who was appointed by the governor Tuesday as director of the California Department of Consumer Affairs, which oversees the state's licensing agencies.

Despite the governor's pledge to better discipline errant health professionals there are signs that it will be difficult to enact sweeping changes as quickly or easily as the administration has suggested. At meetings in Sacramento on Monday and last week, regulators and state attorneys generally spoke of the need for reform but picked apart potential solutions presented to them. They offered no concrete time frames for having a workable system in place. Even officials within the same agency couldn't agree on solutions.

Hackers got access to 130 million credit and debit card accounts, federal prosecutors allege. But the account that matters most is yours, right? Here's a consumer guide to the info breach. Does the law require a company to inform me if my card was possibly accessed? Normally, yes. California's privacy law forces businesses to notify state residents whose information might have been breached. But it has limits: If the number of people to contact exceeds 500,000, or if notification costs exceed $250,000, companies are not required to directly contact all potential victims.

The state has been blocking cheap online access to used-car histories, forcing consumers to pay $30 to a private firm for fast information that is widely used to avoid buying a lemon -- and is readily available from many states for about $2.50. A contract the state signed with the owner of Carfax has left California behind the curve in providing such data to car buyers. But lawmakers this week passed and sent to the governor a bill that a calls for the state to make vehicle histories more accessible.