Jack & Jill Politics

Late last week, President Obama appointed Harvard Professor Elizabeth Warren to head up his new Consumer Financial Protection Bureau, which is intended to be a watchdog for Wall Street & Friends jacking up Main Street.

From the White House blog (video from Obama/Warren Rose Garden announcement):

But the news of the day was the announcement that Elizabeth Warren would lead the Consumer Financial Protection Bureau — one of the central features of Wall Street Reform as explained in our animated video — in getting it off the ground:

She’s a native of Oklahoma.  She’s a janitor’s daughter who has become one of the country’s fiercest advocates for the middle class.  She has seen financial struggles and foreclosures affect her own family.

Long before this crisis hit, she had written eloquently, passionately, forcefully, about the growing financial pressures on working families and the need to put in place stronger consumer protections.  And three years ago she came up with an idea for a new independent agency that would have one simple overriding mission:  standing up for consumers and middle-class families.

The President touched on some of issues the bureau will focus on:

Never again will folks be confused or misled by the pages of barely understandable fine print that you find in agreements for credit cards or mortgages or student loans.  The bureau is going to crack down on the abusive practices of unscrupulous mortgage lenders.  It will reinforce the new credit card law that we passed, banning unfair rate hikes and ensure that folks aren’t unwittingly caught by overdraft fees when they sign up for a checking account.  It will give students who take out college loans clear information and make sure that lenders don’t game the system.  And it will ensure that every American receives a free credit score if they are denied a loan or insurance because of that score.

Basically, the Consumer Financial Protection Bureau will be a watchdog for the American consumer, charged with enforcing the toughest financial protections in history.

I had a chance to meet Prof. Warren in person at Netroots Nation 2010 and found her to be refreshingly normal-sounding/behaving. She’s uniquely able to grasp both the common American experience plus the complexity of economics and talk about it at any level. She’s also got real vision & commitment. She *really* doesn’t need this job. It’s going to be hot, hard & dirty work and she’s gonna take a beating from The Man. But she seems to want this gig because she gets that the middle class is really struggling — and that someone like her can help. AND she says the Prez has got her back. I hope that’s right on…

Right after she appeared before the public in the Rose Garden with President Obama on Friday, she jumped on a call with a bunch of bloggers including a lucky yours truly. Here’s the question I asked followed by David Dayen of FDL’s followup question piggybacking off mine (read his blog post):

Q from Jill/Cheryl:   Hello, Ms. Warren, congratulations.  I would like to follow up on a question that I have — that we’ve discussed before, which is about homeowners.  I think one of the greatest points of pain right now in America besides jobs is the result of predatory and discriminatory lending practices around mortgages. And so I’m wondering what the agency will do to offer some relief to homeowners.

MS. WARREN:  Well, I think you’re exactly right.  You know that this is an area I worry deeply about.  I worry about it because the home is not only central to the personal lives of tens of millions of Americans but also to their economic lives.

Just yesterday I was being interviewed by the FCIC about the reasons for this crisis, and we were having this very long conversation.  And I made the point about how homeownership has been the number-one retirement plan in America for three generations, the idea of paying off the home and living on Social Security and then knowing if you had to you’d sell the house if you had a really serious setback, and how much of that is destroyed by the kind of crisis that we’re in now so that we have people — it’s about people who can’t stay in their homes and who not only have to move, they’ve lost everything they thought they’d built up across — for some people across many, many years.

So I only say that — I’m sorry I’m taking longer, I know I should keep these shorter — but, yes, there are two good pieces of news about this new bureau.  The first is that Congress gave plenty of jurisdiction here over home mortgages.  And this is important because never before in the law has there been a single agency to look at home mortgages, whether they are issued by nationally chartered banks or private investors, whether it’s found under state law, under federal law.  So this is one for which the tools laid out on the table are strong.  And I think that means over time we’re going to be able to get some real reform in this area.

But the second thing I wanted to say — because I really do want to applaud Congress here — they took no chances.  There are also specific provisions in the law about certain practices that must stop now.  And so the job of this bureau is not to engage in rule-writing; it’s to get out there and enforce the law that’s now in place.

So I just want to say I think Congress has made it clear, I think the President of the United States has made it clear:  Cleaning up the mortgage market is a priority.  And that’s what this agency should be out there doing.

I hope that’s helpful.

Jill/Cheryl:    Yes, thank you.

MS. WARREN:  Good.

Q from David Dayen: Hi, Elizabeth, how are you doing?  And congratulations to you.  Kind of a follow-up to Cheryl, right now we have a near-term problem with the HAMP program, the Home Affordable Mortgage Program, and how it’s treating customers.  Borrowers — I’ve done an extensive series on this where borrowers have told me about some real horror stories.  What can the bureau do right away to alleviate this problem, perhaps come up with a consumer advocate kind of scenario where they can help people cut through the confusion, all the documentation that is getting lost from the banks, all of the extensions and delays where the banks are violating the rules of HAMP and not following this program to the benefit of customers — what can be done right away on HAMP?

MS. WARREN:  Well, David, you know that the Congressional Oversight Panel has done three reports so far on HAMP.  And we have not been shy in calling out shortcomings in the program.

But this is one of the reasons I am very pleased to make this shift from being on the outside to being on the inside.  I’m having lunch with Secretary Geithner on Monday and I am glad to have the chance to try to work on the inside with thoughts about how the consumer bureau can be helpful to getting HAMP to a better place.  Now, I should say — I shouldn’t just say HAMP — that narrows it too much.  What I want to talk with Secretary Geithner about is the whole problem we’ve got in mortgage foreclosures and to ask how I can be helpful.

I have no doubt that the Secretary is not happy about where American families stand right now in the mortgage foreclosures — in the foreclosures that have already occurred, the people on the verge of foreclosure, the foreclosures that are predicted for the future.  And so it really is a case of I’m making the change; I’ll have a new office on Monday, and I want to be part of the team to see if I can be helpful in some way on that.

I realize I haven’t said much with specificity.  This is a hard problem and it’s got a lot of hard, moving parts to it.  And so I want to get in there and see if maybe there’s a way to be helpful.  I hope that’s useful to you.

Larry Summers & Tim Geithner — watch your back…Supermom is coming up behind ya and I think she’s on our side!