Thursday, September 23, 2010

Elizabeth Warren's Audio Interview On NPR: Does The Lady Know Whence She Speaks?

Yesterday, NPR's Robert Siegel of All Things Considered, interviewed Elizabeth Warren, the new de facto head of the new Consumer Financial Protection Bureau. President Obama bypassed her confirmation hearing by appointing her as an "Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau."

After listening to her responses as to why the President bypassed the confirmation process and what her agency can do to help banking consumers, I lost a lot of respect for her and I question her ability to be an effective head of the CFPB.

Warren says in her interview that bypassing confirmation was done to speed her ability to help consumers. She said that if she had to go through a confirmation process to become head of the CFPB:
...I could not have worked on the agency for months and months, possibly over a year. ... So the question was, would the president nominate me [as director] and sort of put me in a pumpkin shell for a while, or could I get started to work immediately? And my own enthusiasm was, I'd really like to get to work right now.
Also in the interview, Warren cited making credit-card agreements simpler for people to understand as a benefit of her agency:
...you have two pages, that's the whole credit card agreement. The terms are clear and flat and easy to see so anyone can read them. So you could lay four credit cards in front of you and say, "Oh, that's the one that has the highest rate, that's the one that has the really scary provision that could hurt me." Now you get a market that starts to work again so consumers can make better choices.
Does anybody really believe that the confirmation process was avoided to speedup the availability of her agency's help to consumers or that her agency, or any government agency, will foster a better market process through extensive regulation and interference.

Secondly, the reason credit card agreements are so complex is because they contain many regulatory required provisions and the exact wording is often set by law or regulation.

As for a simple to understand, comparative sheet of credit card terms, the various federal banking agencies, FDIC, OCC, Federal Reserve, the former OTS, and occasionally the FTC, had the power individually and certainly together, through information sharing, to issue consumer information about every bank's credit card offer terms and conditions on a government website or in a government publication in a very simple to understand format.

Nothing stopped these federal agencies from providing banking consumers with individual credit card information except their own reluctance and ineffectiveness. A simple reprimand from Congress, without new legislation, would have gotten the agencies to provide the consumer information she touts as a benefit of her new agency without the necessity of creating a new federal bureaucracy and a new government agency head.

Listen to the complete 6 minute interview of Warren here, below or download to a portable listening device and draw your own conclusions about Warren.


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