http://www.huffingtonpost.com/2010/04/29/elizabeth-warren-gop-refo_n_556362.html
It's time for senators -- especially the Republicans -- to square their upcoming votes on financial reform with their long-professed desire to protect families, said consumer advocate and federal bailout watchdog Elizabeth Warren on Wednesday in an interview with the Huffington Post.
The Senate bill, authored by the banking committee's chairman, Christopher Dodd, a Connecticut Democrat, calls for a consumer entity to be housed inside the Federal Reserve. It largely, though, adheres to Warren's four tests: a chief appointed by the president, an independent source of funding, the authority to write consumer rules and the ability to enforce them against unscrupulous lenders. The unit, thus, focuses squarely on consumers. Ensuring banks' profitability is left to banking regulators.
The Republicans' counter-proposal, released this week, fails all four of Warren's tests.
It calls for a council led by the heads of the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve. They'd issue rules, supervise "our nation's largest financial institutions, large non-bank mortgage originators, and other financial services providers who have violated the consumer protection statutes," and enforce the rules.
Warren isn't thrilled with the idea of allowing bank regulators -- whose top priority is to ensure the profitability of the nation's banks -- to continue to oversee consumer protection, particularly when the OCC is involved.
"The problem with consumer protection is structure. Our current consumer regulatory process is designed to fail, and if we don't fix it, it will fail again," she said. "In every major dispute between customers and banks, the OCC entered the fray on the side of the banks. Clearly, banks -- not their customers -- were the OCC's primary interest. The idea that the OCC would now be in a position to veto the new consumer agency is shameful.
