Tags: US | Financial | Overhaul | Consumer | Protection

Warren to Bankers: Regulation Is Good for You

Thursday, 30 Sep 2010 07:53 AM

Obama consumer finance adviser Elizabeth Warren took a conciliatory tone with bank executives Wednesday, asking them to work with her on new disclosures that will make credit cards fairer and easier to understand.

In her first major speech since being tapped to help set up a new consumer finance regulator, Warren argued that the agency can help banks by clarifying what regulators expect of them. She said better oversight can help consumers make good choices, and push companies to compete on price and quality rather than using hidden fees.

"Good regulations can create an opportunity for good businesses to thrive," Warren told about 400 bankers gathered in Washington for a dinner organized by the Financial Services Roundtable. In prepared remarks, she said the new regulator's purpose is to create "a level playing field where the best products at the best prices win."

Warren also addressed a question on many attendees' minds: How would she work with an industry that fought against the agency's creation, and tried to block her from running it?

"I have not kept my opinions to myself about where I think the financial industry has gone wrong. And I notice some of you have not kept your opinions to yourself about me," she said.

Warren went on to argue that her views are not all that different from those of many bankers. She said banks suffer from competition with less-regulated lenders, and that the agency's rules would apply to every type of company and thus level the playing field.

"We have a remarkable chance to put aside misconceptions and preconceptions — whether they are yours or mine," Warren told the group. Later, she said, "I'm here to ask you to work with me."

She said the alternative to collaboration was a topdown approach in which regulators continue adding new rules without considering how they affect banks.

The consumer agency is a cornerstone of the sweeping financial overhaul signed into law this summer. Warren was seen as a top candidate to be named its first director. Instead, President Barack Obama created a special role for her: advising the White House and Treasury as the agency is being set up.

The agency, which Warren first proposed in a 2007 article, aims to protect consumers from tricky or deceptive loans and other financial products. Its early efforts will involve making mortgage and credit card disclosures easier to understand.

The agency was a major sticking point for lawmakers debating the financial law. Banks said the agency was unnecessary bureaucracy and would create confusion without helping consumers. Democrats said it would address a root cause of the crisis: bad loans to consumers who couldn't pay them back.

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Obama consumer finance adviser Elizabeth Warren took a conciliatory tone with bank executives Wednesday, asking them to work with her on new disclosures that will make credit cards fairer and easier to understand.In her first major speech since being tapped to help set up a...
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