Posted on Sunday, March 20, 2011
In a testimony before the House Subcommittee on Financial Institutions and the Consumer Credit Committee on Financial Services, Elizabeth Warren explained the role the new Consumer Financial Protection Bureau (CFPB) will have regulating mortgage lenders and servicers.
Warren, whose role is the special advisor to the Treasury secretary for the CFPB, said she has been meeting “early and often” with representatives from the financial industry in order to make sure the lines of communication are open.
“It is important that the consumer bureau not become an uninformed or ossified bureaucracy that suffocates the industry it regulates,” she said. “It is also important to identify and minimize unintended consequences of regulatory and other initiatives.”
According to her testimony, some of the main missions of the new bureau are to advance innovation and reduce outdated, unnecessary, or overly burdensome regulations.
Warren said the role of the CFPB will be that of a cop on a beat enforcing basic rules to govern the mortgage industry.
“The current economic crisis began one bad mortgage at a time,” she said.
In addition to promoting a fair market and developing an office for consumer literacy to help consumers understand different financial products, the CFPB will supervise non-bank financial companies as well.
Companies such as brokers, lenders, servicers, payday lenders and private student loan companies will be subject to federal compliance examinations. Warren says the bureau will strive to enforce the federal consumer financial laws while remaining aware of compliance costs for such entities.
By: Joy Leopold, DS NEWS