Elizabeth Warren, newly appointed special adviser to the Secretary of the Treasury on the Consumer Financial Protection Bureau (CFPB), wants to build an agency that works for middle-class families, the community, and the economy.
Tired of seeing consumers knocked around by the one-two punch of rising core expenses and flat wages, Warren said too often consumers are misled about the real cost of their debt and can’t get comparative or competitive pricing.
“Consumers today see complicated deals and pages of fine print” in their credit agreements, Warren noted during Tuesday’s General Session. “Customers have no real chance of understanding these agreements.” She chided some financial service providers that tout low initial up-front costs, only to load the back end of their agreements with added fees, upcharges, and repricing.
Noting a niece who ran into financial difficulty due to misleading pricing, Warren spoke reverently about the credit union that helped get her finances under control. “That credit union will always be a part of our family,” Warren said.
She sees the CFPB and credit unions becoming allies, promising an open line of communication. “If government regulation is part of the problem, we want to hear about it.” She promised to do what regulators have been unable to do for 20 years: combine Truth in Lending Act and Real Estate Settlement Procedures Act provisions into a single, comprehensive document.
Also on Warren’s agenda for the bureau:
- A one-page mortgage shopping sheet that consumers can read and understand;
- Rules that cover every financial service provider; and
- Enforcement of those rules.
“The single biggest undertaking we have…and where we are spending over half of our budget, is oversight of the 120 biggest financial institutions and 80,000 nonbank financial lenders,” Warren said.
She promised that her newly created office for small financial institutions—credit unions and community banks—will never surprise credit unions with its rulings because of the open dialogue the office intends to have. She invited credit unions to contact firstname.lastname@example.org with their concerns.
“We need to make credit unions part of the DNA of this bureau [CFPB],” Warren said. “For this bureau to succeed, credit unions must remain a major presence in the American economy.”