By Christopher S. Rugaber

WASHINGTON (AP) — Lawmakers proposed Tuesday to create a new government agency that could stop lenders from offering mortgages and other financial products deemed unsafe for consumers.

Supporters said the legislation's broader goal is to apply the same type of consumer protections in the financial sector that exist for other products such as children's toys and pharmaceuticals.

That, in turn, could help prevent future financial crises by limiting the spread of destructive products such as mortgages that borrowers can't afford to pay, the lawmakers said.

"We don't say 'buyer beware' when people are buying prescription drugs, or when they're concerned about lead paint in toys," said Sen. Richard Durbin, D-Ill, sponsor of the bill. "But when Americans purchase financial products ... they often have little idea what those products ... contain and whether they're good for their families."

Elizabeth Warren, a Harvard University law professor and chair of a congressional panel overseeing the $700 billion bank rescue program, said such a regulator could have taken steps to prevent the spread of mortgages that borrowers couldn't afford, the root of the current financial crisis.

"Consumer financial products were the front end of the destabilization of the American economic system," she said.

Consumer protection is currently scattered across 10 different financial regulatory agencies, Durbin said, and the bill would consolidate that function in a Financial Product Safety Commission. The commission would be charged with improving consumers' financial education on products such as mortgages and credit cards, he said.

Reps. Bill Delahunt, D-Mass., and Brad Miller, D-N.C., said they would introduce similar legislation in the House next week.

Some banking industry groups aren't keen on the idea. Scott Talbott, chief lobbyist for the Financial Services Roundtable, said a new agency would create "unnecessary and burdensome layers of regulation."

The proposal comes as Congress begins what is sure to be a lengthy process of overhauling the nation's financial rule book. Committees in both the House and Senate are holding extensive hearings on the issue.

Federal Reserve Chairman Ben Bernanke said Tuesday that financial rules should be rewritten to prevent future financial meltdowns, though he did not endorse the type of agency the lawmakers are seeking.

Consumer protection is part of the Fed's mandate, but Sen. Charles Schumer, D-N.Y., said the agency has been "asleep at the switch."