Law professor Elizabeth Warren

Special Advisor on the Consumer Financial Protection Bureau identifies the agency’s to-do list before it goes online and its mandate once it receives statutory powers.

Time named Elizabeth Warren one of the world's 100 most influential people and President Obama selected her to launch the newly created Consumer Financial Protection Bureau. She's devoted much of her career to studying the economics of middle class families and is also a best-selling author of books on credit and economic stress. On leave from teaching law at Harvard, Warren previously taught at Texas, Michigan and Penn and is credited with groundbreaking research on the U.S. bankruptcy system. She formerly chaired the Congressional Oversight Panel.


Tavis: Elizabeth Warren is a special assistant to the president and the woman in charge of setting up the new Consumer Financial Protection Bureau. She is also a noted author whose books include “The Two-Income Trap.” She joins us tonight from Washington. Professor Warren, good to have you back on this program.
Elizabeth Warren: Oh, it’s good to be back on this program.
Tavis: Let me start, full disclosure – when the announcement was made when this agreement came to be on this financial package, that we were going to have this new consumer protection bureau, I, along with many other Americans, said publicly that I thought you should be the person to run it. Let me put that out there up front, number one.
Having said that, the president chose not to go that route, chose to put you in charge of setting up the agency. Having said all of that, how are we doing so far getting this thing set up?
Warren: This is really exciting right now. I’ve spent my whole grown-up life working on economic issues affecting working families, and a big part of that has been about the fact that there have been flat incomes, rising core expenses and a lot of families that turned to debt. Those debt products have gotten more and more dangerous.
For the first time, here I am on a job where we’re starting to put pieces in place to be able to change that, to be able to do some good, and it’s exciting.
Tavis: Give me some sense of where we are in the process. We’re hoping, again, that one day this agency is going to be up and running with some teeth and some accountability. Where are we on this journey?
Warren: Okay. So remember July 21st, the president of the United States signed the bill into law that created this agency, and the agency will go live – that is, it will get its statutory powers one year exactly from the time he signed it, so next July 21st, we become an agency that actually has power.
We take over responsibility for enforcing the federal consumer law statutes that are out there and for making new laws as needed, and for creating a platform for financial education.
So, next July 21st. So what we’re doing right now here in January is boy, we’re trying to put everything in place so we’re ready to do that. We’re hiring people, we’re getting space, we’re reading the statute, we’re figuring out our strategies for what comes first, what comes second, trying to kind of put a whole business plan together. I guess we’re kind of a start-up here in the government, so we’ll be ready to work on behalf of American families.
Tavis: To your point now, to whom is this bureau accountable, and to whom – I should say who has oversight over this bureau?
Warren: Well, number one, this bureau is accountable to the American people. Unlike some, we are not here to be accountable to the banks; we are not here to be accountable to the rich and powerful. We are here to b a voice on behalf of the American people, and to be accountable to them.
Now, the way the thing is set up, the structure of it is just like all the other federal banking agencies. When we make rules, we’re subject to something called the Administrative Procedure Act, about how they have to be published and consulting and so on, so it’s just like everybody else.
And our money comes from the Fed, like the other banking agencies. We’re not part of the taxpayer dollars and the political process. It all comes from other sources.
And at the end of the day there’s one thing about this agency that means there’s a little more oversight over it than the other federal banking agencies, and that is if we put some rules forward that the other banking agencies say, “Whoa, you went a step too far,” then they have the ability to vote, if they vote by two-thirds, to overrule us.
I don’t think that’s where we’re going to head, but the point is there’s some ultimate oversight out there that doesn’t exist for the other banking agencies. But I think we’ve got a lot of room to go before we’d hit anything like that.
Tavis: To your earlier point, Professor Warren, this agency is not part of the political process as we know it, and you’ve laid that out now quite nicely. Clearly, for us, having said that, how do you keep the politics out?
Warren: Well, I’ll tell you partly how I do it – I do it by getting up every morning and doing my job. To the extent other people want to talk about politics, my view on this is I just keep talking to the American people. We just keep trying to put the pieces in place for them.
We’re here because of credit cards and mortgages and remittances and short-term loans. We’re here to make sure that there’s a level playing field; that people can see what the costs are up front; they can see what the risks are; they can compare one product to another. And you know, we didn’t get to be an agency because there are bunch of lobbyists who wanted us. We got to be an agency because there are a lot of American people who thought it was time for this.
I figure ultimately, those are the people who care about this agency and that’s who we’re here for, and they’re going to keep us safe. I’m going to stay out of the politics.
Tavis: Speaking of the politics, you might want to stay out of it but it swirls all around you, and since it’s swirling all around you, let me ask a couple of questions about what’s swirling around you.
The rub against you, for those who were opposed to you, your critics kept suggesting that you could not get along with the business community. Indeed, there are those in the business community who suggested that with someone like you at the head, innovation would be inhibited. Tell me how you’re getting along with the business community.
Warren: Well, I’m going to say two things. The first one is about that innovation business. I made it real clear to the business community – if your plan for innovation is to trick people, is to fool them, is not to tell them the truth about the price, then you’re right, I’m going to be right in the way.
If your plan is to put a product out there that people can see and understand, then by golly, we’re going to get along just fine. I’ve been reaching out a lot to the business community, I’ve been talking a lot to the CEOs of the great, big Wall Street banks, but I’ve also spent an awful lot of time with people in the community banks, and I really think there’s a real partnership to be formed here.
There are a lot of folks who are in small banks, some in big banks, who really want to offer good and decent products to their customers, but they’re out there competing with people who are willing to engage in a lot of really slick practices. Our job is to be the cop on the beat, to make sure that the competition is visible and fair, and there are a lot of businesspeople who welcome that.
So I think we’re kind of shaking things up on this end, making some new friends, and look, there are going to be some people who are never going to like what we’re doing, and my view on that is if they don’t like us for the right reasons, then that’s okay with me.
Tavis: Another question about the politics swirling around you. As I mentioned earlier, so the president, when given the opportunity, decided not to outright appoint you to run the bureau, as I said earlier, but instead put you in charge of setting up the bureau. Obviously, you must have found some favor with that because you didn’t have to accept the appointment he gave you and you did.
So at some level, obviously you’re cool with that. On the other hand, the president just reached out recently and, and appointed clearly a pro-business advocate to be his chief of staff. Is the White House sending mixed signals here?
Warren: All I know is the part that I’m here to take care of, and that is this consumer agency. On the consumer agency, there’s no mixed signal. Here’s how it was. From the very first time I met with the president of the United States about the agency, he said, and he’s right, there were two jobs on the table – one is the director, long-term, but you have to understand on that job it’s a long, long time.
We make the nomination a long, long time before we can get a vote. You can’t talk about it; you can’t do any work on it in the meantime, because those are the rules. The alternative is there’s somebody needs to get in there right now and start putting the pieces together to make this work so we’ll be ready July 21st to get up and going.
I said, “Mr. President, that’s the one that excites me,” and he said, “Good, that’s what I’d like you to do.” So we’re in a good place on that, and I think what he wants – in fact, I know what he wants is a strong consumer agency that’s here to work on behalf of hardworking families.
Tavis: I’m sure he does, and yet there are millions of folk, I suspect, who still want you, if what I’m reading is correct, and I see this stuff every day, people who still want you ultimately to be the person to lead that bureau. So I understand the job you’ve accepted at the moment, but are you interested in the other job, and if offered, would you accept it?
Warren: Right now I’ve got my plate so full doing the job I’m doing, if you let me, Tavis, I’m just going to push off that and say I’m not going to worry about that one today. Today, I got plenty on my plate, and so that’s what I’m going to keep working on. We’ll let the future pop up later.
Tavis: Yeah, because I like you a lot, I’ll let you get a pass on that. But you knew that question was coming, though, didn’t you?
Warren: Yeah, I (laughter) kind of thought it might, and I have to say I appreciate the pass.
Tavis: Yeah, no, no, it’s hard to talk to Professor Warren these days and not raise that question. Before I let you go here, all of this stuff is really moot if we don’t get the American people back to work. Give me your sense of the jobs picture as we move forward.
Warren: Well, things are better than they were in the worst part, but my view on this overall, Tavis, is that the problem we’ve got with working families in America is not one that just started two years ago with this crash. We’ve had a long-term problem here, and the long-term problem has been not just jobs, it’s jobs and flat wages, even for those who do have jobs.
That has really caused a lot of families to have to turn to debt and a lot of that debt, as we’ve talked about, has become very dangerous.
So I’m going to go back to the part that I work on – there’s a lot of trouble for middle America. We’re all out there struggling hard. The hole in the bottom of the boat that I’m trying to work on is the one on credit – what happens to folks on mortgages and credit cards and the like.
I think we’re making real progress in the right direction, and I hope that’s part of a bigger effort to keep us going the right way. It’s hard out there, and now’s the time we’ve really got to be rebuilding not the top, we’ve got to be rebuilding the middle. That’s what we need.
Tavis: Her job at the moment is setting up this Consumer Financial Protection Bureau, and she’s hard at work at making that happen. She is, of course, Professor Elizabeth Warren. Professor Warren, good to have you back on this program, and I’m sure we’ll be talking to you more between now and July.
Warren: I hope so. Thank you, Tavis.
Tavis: Thank you very much.
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Last modified: April 26, 2011 at 12:28 pm