Last week, professor Elizabeth Warren, who has been tasked by President Obama with setting up the new Consumer Financial Protection Bureau, met face-to-face with some 30 community leaders in San Francisco, in a meeting that included myself and our executive director, Orson Aguilar. To say we were impressed is putting it mildly -- but also possibly beside the point.
The point is that this new agency has, in Warren's words, "the capacity to change the consumer credit market forever," and for the better. For that very reason, there are forces seeking to destroy it before it even opens its doors.
The meeting began with three consumers -- two homeowners facing foreclosure and a gentleman who was victimized by a scam artist who claimed he could help solve the man's debt problems. The stories were disheartening, but sadly not unique.
Warren manages to channel the frustration that stories like these generate into a drive to make CFPB as strong a protector of consumers as possible. She's as warm and down-to-earth as anyone I've ever met. She's brilliant but not overly academic, and completely unpretentious. Despite having come straight off the plane with hardly a chance to get a bite to eat before our sit-down, she was warm, gracious, and went out of her way to address everyone by name. Her answers were clear, direct and straightforward -- much, much more so than we're used to from high-level officials. Her forthrightness was as startling as it was refreshing.
Perhaps more important, she gets it. She understands that the CFPB has the ability to transform a field where business models based on tricks and traps have been far too common. She recognizes the importance of openness. She said she wants CFPB to be primarily led by the people it serves -- by their questions, concerns and needs. Among other things, that means building a strong and serious interactive component into the agency's website before it opens for business. And she pledged that whatever data the agency receives, the public will get.
What Warren envisions is nothing less than the first truly 21st century regulatory agency -- one that will be engaged with the community and make use of new technology to gather data quickly and put it to use immediately to protect consumers. If the agency is set up correctly, she said, consumers will be the true "boots on the ground."
Right now, she noted, there is lots of profit to be made by tricking consumers. Weeding out those tricks and traps will lead to more stable products and ultimately a more stable and effective system, because banks and other institutions won't be able to boost short-term profits by fooling consumers at the expense of long-term stability.
As Warren has been fond of saying, thanks to agencies like the Consumer Product Safety Commission, you can't buy a toaster that will burn your house down, but you can still get a mortgage that will take your house away. CFPB can change that -- but only if it doesn't, as she put it, get its "wings chopped off" before it begins to fly.
And make no mistake, the ax is being sharpened even as I write this, and the Republican majority in the new House will be looking for chances to swing it.
The very existence of CFPB -- which the financial industry declared openly that it would kill while the bill was being debated -- is a victory. But it will only be a real victory if it's allowed to do what consumers need it to do. All of us have a responsibility to stand up for the strong, independent, consumer-driven CFPB that Warren envisions. This has the potential to be one of the most important reforms enacted in many, many years, but the forces lining up against it are real and powerful.
Fortunately, Warren has considerable political smarts as well as pro-consumer instincts. She understands the need for CFPB to focus initially on an agenda that will make a real difference for middle class Americans, enabling it to quickly be seen as an essential consumer protection force that politicians and business interests attack at their own peril.
That's why opponents will try to eviscerate the bureau before it gets established. And that's why we can't let them.