Obama appointment of Warren welcome – National Consumers League

By Sally Greenberg, NCL Executive Director
The National Consumers League issued a statement this weekend applauding President Obama’s appointment of Elizabeth Warren as interim director of the Consumer Financial Protection Bureau (CFPB). Warren’s name is all over this job; the concept behind the CFPB was Warren’s, and she’s been a vocal consumer advocate who long ago recognized that consumers were being unfairly saddled with staggering fines and fees due to fine print in legal documents that few could understand.

I remember hearing her speak at the Consumer Federation of America’s Financial Services conference two years ago, when she was advocating for the creation of a CFPB. Warren explained that just as there is a Consumer PRODUCT Safety Commission to protect against dangerous TVs or toasters, there ought to be a Consumer Financial Protection Agency to protect against dangerous financial products. Warren analogized further: just as consumers aren’t expected to look at the wiring diagram in the manual that comes with the TV or toaster to find the defect, nor should they be expected to read through 30+ pages of fine print to find the tricks and traps that await them when they sign credit card, mortgage, cell phone, or any other consumer contract. Her analogy was as compelling then as it is today, and Warren ultimately won the day with her arguments. Congress established the framework for the agency in the recently passed financial reform legislation, and Warren will be the first head, albeit an interim post for her.

New York Times consumer columnist Ron Lieber asked Warren what her priorities would be, and she thanked him for asking but said at this early stage, “I can’t say anything about anything.” So Lieber designed his own to-do list for Warren and I think it’s a good one.

  1. Student loan reporting to the student’s college or university.
  2. Requiring colleges to publish the rate of default disclosure on student loans, this is particularly needed for the many for-profit schools where students take out huge loans and end up with a degree that prove useless in finding a job and they default on their student loans but the for-profit schools keep the tuition money.
  3. Free unlimited access to credit scores.
  4. Requiring lenders, landlords, and employers to disclose which credit scores or reports they intend to check
  5. More 45-day warnings. Give consumers 45-day warnings before lowering their credit limit – right now, cards are required to warn before increasing your interest rate or annual fee or other charge under the new bill. Adding the warnings about lowering credit is something the new bureau could do.

I’m a big Elizabeth Warren fan – I sent her an email note over the summer as I was having dinner outside Boston with a group of women friends who had just unanimously agreed that the President should appoint her. She responded in kind that this was almost better than a presidential appointment. Warren may be blunt, but she’s also charming, and that will go a long way. American consumers are fortunate, indeed, to have someone of Elizabeth Warren’s stature, integrity, commitment and diplomatic skills at the helm of the CFPB.