Posted on Wednesday, 15th September 2010 by Charlotte W
Ending months of speculation, President Obama has asked consumer advocate Elizabeth Warren to lead efforts to establish an agency intended to protect consumers against hidden hazards in mortgages, credit cards and other financial products.
Obama named Warren to be an assistant to the President and special advisor to the Secretary of the Treasury on the new Consumer Financial Protection Bureau. As such, she will play a major role in shaping the new agency and determining how strong a posture it takes on consumer financial protection. “The new consumer bureau is based on a pretty simple idea: people ought to be able to read their credit card and mortgage contracts and know the deal,” Warren wrote today on a White House blog confirming her appointment. “They shouldn’t learn about an unfair rule or practice only when it bites them—way too late for them to do anything about it.” “The time for hiding tricks and traps in the fine print is over,” she continued. “This new bureau is based on the simple idea that if the playing field is level and families can see what’s going on, they will have better tools to make better choices.”
Agency was her idea
Warren, a Harvard law professor who chaired the congressional oversight panel for the Troubled Assets Relief Program (TARP), is widely credited with first proposing the idea for an agency to protect consumers against hazardous financial products and was a primary advocate for its creation. Warren said consumers needed an agency to protect them against hidden risks in as mortgages, credit cards and other financial products the same as the Consumer Product Safety Commission does for everyday items. “You can’t buy a toaster in America that has a one-in-five chance of exploding, but you can buy a mortgage that has a one-in-five chance of exploding, and they don’t have to tell you about it,” she would often say.
Strong opposition in financial sector
The appointment is widely regarded as a way avoiding a drawn-out confirmation battle in the Senate that might occur if Obama were to formally appoint her as the agency’s first director. There is strong opposition to her in the banking and financial industry, and among their allies in Congress, based on her sharp criticisms of the industry and outspoken advocacy for consumers. Sen. Chris Dodd (D-Conn.), chair of the Senate Banking Committee, has been a leading opponent, first calling Warren “unconfirmable” and more recently saying that circumventing the confirmation process leaves the new agency “vulnerable.” Dodd and others have suggested that the new agency ought to be headed by someone with banking industry experience. However, consumer advocates and progressives in general have been staunch advocates for Warren, saying that a consumer protection agency should be headed by a consumer advocate and not someone who might be disposed to favor the industry being regulated.
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Tags: Advocate, Consumer Advocate
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