Elizabeth Warren, on the emerging consumer financial protections

Original source: SimoleonSense.com .

Interesting Q&A

Introduction (Via Stephanie Vallejo @ Boston.com)

One of the nation’s leading experts on bankruptcy and author of several best-selling books on personal finance and the struggles of the middle-class, Elizabeth Warren has taken leave from her professorship at Harvard Law School to serve as chairwoman at the Congressional Oversight Panel. Congress created the panel during the economic crisis of 2008 to review the state of financial markets and the regulatory system and to track how the money for the bank bailouts was spent. Warren has been the leading advocate of the creation of the Consumer Financial Protection Agency, one of the cornerstones of the financial regulations bill awaiting final Senate approval, which could come this week. The agency seeks to protect consumers against abusive, convoluted, and opaque practices  of lenders.

Although Professor Warren declined to comment on whether she would be interested in being the first director of the agency, she has agreed to talk to us about details of the agency and other elements of the financial bill.

Important Excerpts (via Stephanie Vallejo @ Boston.com)

Q. The overall bill provides a framework for regulations, not a detailed blueprint, and many contend that its strength, the connective tissue for the law, will only be determined when regulators actually write the specific rules. When this process begins, to which areas will you be paying particular attention concerning the consumer agency, to make sure the safeguards are as strong as intended?

EW: I want to see the agency push the consumer credit market toward easy-to-read credit agreements with no more tricks and traps. Families are tired of fine print. They should be able to make clear-eyed decisions about their credit and to see the real costs and risks upfront. Note that this isn’t a partisan issue. According to a recent AARP survey, 96 percent of Americans support clear, transparent credit contracts they can understand.

Q. Give us an example or two of how the consumer agency will tangibly change how we get our mortgages, pay our credit cards or get a loan for our cars?

EW: The agency will set its own agenda, but I would like to see a world with two page mortgage disclosures, two page credit card agreements, and two page overdraft contracts. The consumer agency has the power to cut the legalese and make that a reality. It can put an end to a world where consumers discover what’s on page 16 of the fine print only after it bites them with a big fee or hiked interest rate. Families expect to be held to what they bargain for, but they are tired of getting caught by all the tricks and traps.

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