Posted on Friday, December 3, 2010
WASHINGTON - Elizabeth Warren pressed consumer advocates to fight on behalf of the newly created consumer protection bureaus she's heading up, warning that it is not yet established like popular cousins such as the Federal Aviation Administration, Food and Drug Administration or Consumer Product Safety Commission.
"When was the last time you heard a friend or colleague--Republican, Democrat, libertarian, or vegetarian--complain that the Federal Aviation Administration should do less to prevent plane crashes?" she said.
The Consumer Financial Protection Bureau, she said, has to fight its way to that solid position. "American families have the agency they need, but they may have to fight for its survival. Goliath may have lost, but unlike in the Bible, this is not a one-round fight," she said.
Warren was speaking before the Consumer Federation of America, one of the more aggressive consumer advocate groups. "Without your continued leadership, the new agency will always be vulnerable -- to those who would deny it authority, to those who would deny it funds, and to those who would deny it an effective place in government," she said.
Warren told the group that she'd been meeting with a number or people who have long done battle with the CFA - "lots of CEOs" of very large financial institutions, Warren said, pushing her philosophy that strict regulation alone isn't enough to curb bad bank behavior and that broad principles must be laid out, too.
She recalled that as credit card reform was on its way to becoming law, one card issuer had already figured a way around a key reform. The law blocked banks from jacking up rates for little reason and with no warning, so the card issuer instead gave every customer a very high rate, then gave customers "discounts." When the card company felt like it, it could revoke the discount and technically be in compliance.
"This agency has a moment, right now at the beginning, to envision fundamental change," she said. "It is this simple: No customer should be asked to take out a loan without knowing the costs or the risks of the deal. And every customer should be able to compare different financial products straight up. Regulations should be about making sure that customers have the information they need to make the decisions that are right for them."
If that happens, she said, the new agency will win the people's favor. If it doesn't, people will know who to hold accountable.
Ryan Grim |