Elizabeth Warren appeared on the White House blog today, explaining her new position as Assistant to the President.
The President asked me, and I enthusiastically agreed, to serve as an Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau. He has also asked me to take on the job to get the new CFPB started—right now. The President and I are committed to the same vision on CFPB, and I am confident that I will have the tools I need to get the job done.
President Obama understands the importance of leveling the playing field again for families and creating protections that work not just for the wealthy or connected, but for every American. The new consumer bureau is based on a pretty simple idea: people ought to be able to read their credit card and mortgage contracts and know the deal. They shouldn’t learn about an unfair rule or practice only when it bites them—way too late for them to do anything about it. The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market. The time for hiding tricks and traps in the fine print is over. This new bureau is based on the simple idea that if the playing field is level and families can see what’s going on, they will have better tools to make better choices.
If the CFPB can succeed at leveling the playing field, we can go a long way toward repairing a gaping hole in the budgets of millions of families. But nobody has ever thought or argued that the consumer bureau can fix everything. Lost jobs, stagnant incomes, rising costs for college, dwindling retirement savings—there’s a lot of work to be done.
Warren’s Assistant to the Presidency will allow her at least a foot in the door on the rest of that work – a voice for the middle class that doesn’t currently exist. Simon Johnson writes:
Second, the president finally has an adviser who understands the financial sector and who has healthy skepticism about its intentions and actions. As we documented at length in 13 Bankers, too many top policy people — both in this administration and all its recent predecessors — have been overly inclined to accommodate the interests of finance, particularly the big banks. In this regard, putting Ms. Warren directly into the White House with the highest possible level of access is exactly the right thing to do — much better, for example, than making her purely a Treasury appointment.
I simply don’t agree that this forecloses on the option for a more permanent appointment – everyone involved has said that’s on the table down the road. For now, she runs CFPB from the outset.
UPDATE: We’ll see what the announcement brings, but there is a good deal of confusion surrounding Treasury’s ability to stand up the agency based on how the law was drafted. You can interpret it as saying that they have full ability to regulate and write new rules, or that they basically have administrative capability and the transferring powers from separate agencies. There’s probably enough in the way of structural planning to do before rulemaking gets going, but Dodd-Frank didn’t exactly make this easy. Warren makes it pretty clear: her task is to “get the CFPB started.”