This morning, Leader Pelosi met with Elizabeth Warren, Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau, along with freshmen, sophomore and junior Members of the Democratic Caucus:
Tomorrow marks the one year anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act which established the Consumer Financial Protection Bureau (CFPB). The CFPB is charged with getting through the fine print and making sure Americans have the information they need to chose what works for them when it comes to mortgages, credit cards and other financial products and services. Visit their very helpful website»
Transcript of a brief photo opportunity at the top of the meeting:
Leader Pelosi. I have the honor of welcoming Professor Elizabeth Warren back to the Capitol, Assistant to the President and Special Advisor to the Secretary of the Treasury on Consumer Financial Protection.
Professor Warren is here the day before the one-year anniversary of the Dodd-Frank legislation, which establishes the Consumer Protection Agency. So we are very eager to congratulate her on her work, thank her for her leadership, and hear from her on that subject. I’m going to yield now to Professor Warren to give some remarks to all of you before we begin our discussion with our Members.
Elizabeth Warren. Thank you very much. Thank you Leader Pelosi. Thank you to Representative Frank and everyone in this room. I’m here at a time of celebration and my thanks again to those who have made it possible for us to be here.
We have an agency that now exists where there was none before, an agency that is dedicated solely to protecting American families. This is a week of celebration for us; this is the one year anniversary of the creation of the new consumer agency. On Thursday we will receive new powers—powers to supervise banks to make sure that they are following the law, powers to write regulations where needed to protect American consumers. We’re here, and we’re going to have those new powers on Thursday, and this is the week we get to celebrate a nomination for a director for this agency.
The work we are doing is real. I want to give you two quick examples. We have already started a project on mortgages; it’s called “Know Before You Owe.” For anyone who has ever closed on a home mortgage you remember a stack of documents and you remember those careful legal instructions: “Sign here, sign here, sign here, sign here, and sign here”—with no time to read, because everyone knew that even if you did read these were documents that were designed to be incomprehensible. What we’re doing is we’re shrinking those down to one page—okay, one page front and back, but lots of white space—something that’s readable, and it’s there for American people to be able to see before they sign on the dotted line: this is what it’s going to cost, these are the major risks, this is how you can…you can ask two principal questions: First, “Can I afford this thing?” And second, “Is that the best deal I can get?” That’s what we have it down to.
And here’s the point I want to make about this, we have also changed how rulemaking is done in the United States with this form and here’s how: we’ve invited in the banks, we’ve invited in mortgage brokers, we’ve invited in consumer groups, we’ve invited in individual consumers, we’re out there doing testing, we’ve brought people in so that everybody’s had a chance to tell us what do you really need in this documentation.
We put out two prototypes for people to look at. We put them on our website. We got 100,000 hits when we posted them. Now guys, these are mortgage documents! We got more than 14,000 people who stayed and filled out comments about what worked and what didn’t work for them. We’ve now taken all that and we’ve re-adjusted the forms. We’ve done a second round, putting it back out there. People are participating, helping us get there. We’re now back again trying to polish it up. Before we ever get to formal rule making were going to have something that works for the industry and that works for American families.
So far we have received praise from the American Enterprise Institute to the Consumer Federation of America. Consumers Union is strongly behind us, as is the American Bankers Association, because we have shown that with good regulations we can reduce costs and at the same time we can increase value for American consumers. That was our prototype; if you want to understand what we’re going to do at the agency you have just seen it. That’s the tip of the spear.
We’ve got other tools available at the agency. I will just mention one. Come Thursday, we’re less twenty four hours away, we’re going to open up our first consumer complaint hotline. We’re going to be doing this differently than from the way it was done before. Before, if you had a problem, you had to figure out who the issuer of your financial product was—which means you had to find out if you had a federal insurer bank or a state-chartered thrift before you found the right place to complain. We’re going to do this product by product. It’s going to take us a while to roll it in, but we’re going to get it right.
So starting Thursday, we will be ready to start taking complaints on credit cards. That’s the place where we’re going to start first. We’re working with the industry, trying to get some actual resolution for people who have problems with credit card companies. We’re going to get back in line, and when we do we will move on to other products as we get through. In other words, we are here to deliver for American families and even though tomorrow is the first day that legally we come to life under Dodd-Frank we are already doing, and all we are going to do from this point forward is more.
I do want to say, though, we are still in a fight. I am grateful to you for getting us here, but it is ironic that tomorrow there is another fight to try kill this agency, another fight to try cut the legs out from underneath it before it’s able to help American families before it’s able to make credit markets work, not just for the largest financial institutions, not just for those who can hire an army of lawyers, but for families.
So, I just want to say about this, we have got to be in this. We fought to get here and we’re going to have to fight to stay here. But it is a fight worth having on behalf of American families. Americans agree with us on this. They are counting on us.
Again, thank you very much and keep fighting.
Leader Pelosi. Thank you very much Professor Warren. We’re so proud of you and hearing what sprang from the Dodd-Frank legislation. On the one year anniversary, I can’t help but harken back further to when we took the Majority in the House and our Majority makers enabled us to pass legislation under the leadership of Barney Frank which established the commission, which you chaired [Warren], which suggested this Consumer Financial Protection Agency to begin with, that then became part of it. But remember way back when we had to fight for the commission and then you took that lead and kept taking us to this place, giving more leverage to America’s working families. But we’re proud of the work that Barney did to make that legislation, that commission possible, that lead to this point to this one-year anniversary tomorrow. Mr. Chairman, Barney Frank.
Congressman Frank. First of all, I was disappointed that Elizabeth Warren wasn’t appointed head of the bureau, but that is in no way a denigration of Rich Cordray, who is the actual appointee and has a particular credibility in defending the right of states to participate in this. We have unfortunately hold-over-federal employees who stalled working, who were not respectful of state consumer protection laws.
And that’s a very important fight. And having someone who was an Attorney General and has worked with other Attorney Generals in a bipartisan way will be helpful.
Beyond that, I want to say, while Elizabeth Warren is going to be leaving now, she didn’t just come up with this idea. And I can tell you it was her idea, and she was a very important leader in a fight to get it established.
And I will quote her, from one of the proudest days of my life and Members of the Committee here, Ed Perlmutter and Carolyn Maloney. We passed this bill in our committee markup, and Elizabeth said: “They told me not even to try this because the banks always win. But they didn’t win today.” In the long run, I think they will maybe think that they did win, although they didn’t know they were winning because they are better off in the system in which this exists.
The other point I just wanted to re-emphasize is, she didn’t just come up with the idea. We now have a functioning agency. There have been a lot of obstacles to getting this bill into play. One of the smart things we did was to give it an independent funding source, so they weren’t able, in their right-wing budgets, to kill it. And it’s critical. And they are very eager to kill this, both because of their ideological objection and their alliance with some of the financial institutions politically but because this is one of our best chances to show the government works, that there is a positive vote for the public sector, that you can’t just leave it to the private sector. This is one where the American public overwhelmingly said the government: “We need you to intervene between us and the private sector. We’re pro-private sector for creating wealth. The private sector has a lot of important roles, but here is a case where we need you to be the intermediary between us and the private sector.” And they are threatened by that.
Elizabeth set that agency up, and let’s just say in closing, we have this fight tomorrow. They are trying to kill it. They don’t have—they have enough political smarts to, Republicans, not to repeal it outright because that’s unpopular. But they have a bill that has a collection of things which, if adopted, would have the same practical effect.
So I am very glad to pay tribute to Elizabeth, not just for coming up with this idea but for being the implementer of it. We have a functioning agency now, and we are going to protect it tomorrow.
And one last advantage for you colleagues. When that hotlines comes, guess who are going to be the major beneficiaries? Your caseworkers. Because they are going to get calls, which we have had a hard time dealing with. My office knows. I’ve had other Members come to me and say, “A person was screwed by this center, what do they do?” You’ll now have a hotline where people can be referred to great service.
Leader Pelosi. Thank you again Mr. Chair. I’d now like to yield to our distinguished Democratic whip to have the last word.
Whip Hoyer. Well, I’ll be brief on my last word. I just want to congratulate Professor Warren, not only for the genesis of this action, which in effect puts the referee back in the field. I talked a lot about you and I have talked in my office about taking the referees off the field and the little guys get trampled when that happens. And you’ve put the referee back on the field, and you have given us an extraordinary outline of how that can effectively serve, and I think the point you made, consumers and financial institutions. I think both will be better off. Chairman Frank made that point, and I think in the long run, financial institutions as well as consumers are going to look at this step forward as a positive one for them, for our economy, and for our families. Thank you very much for all that you have done.
Elizabeth Warren. Thank you, thank you.
Whip Hoyer. You bet.
Congressman Frank. Just had me think about a very appropriate biblical sequence…
Whip Hoyer. I do that for Barney.
Congressman Frank. We had Genesis. Now we’re going to have Exodus, but it’s going to be followed by Numbers. [Laughter.]
Leader Pelosi. Since Steny didn’t have the last word, I’d like to also acknowledge two members of Barney’s committee who are here: Ed Perlmutter thank you for your great work and Carolyn Maloney, a champion for consumers.
Thank you all very much.