Warren to Assist Obama in Creating Consumer Protection Bureau

Elizabeth WarrenConsidered a hero by consumer groups and a nemesis to big banks and the Wall Street elite, Elizabeth Warren will serve as assistant to President Obama and special advisor to U.S. Treasury Secretary Timothy Geithner as she spearheads the creation of the new Consumer Financial Protection Bureau.
Warren is a Harvard professor and a longtime friend of President Obama. The Bureau, a controversial cornerstone of the sweeping financial oversight reform signed into law in July, was Warren’s brainchild. As Assistant to the President, she shares a title held by senior White House staff.
Warren herself posted the announcement of her new role on the White House blog today, reiterating her primary mission of protecting Americans from abuses by credit card and mortgage providers.
“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,” Warren wrote. “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 Bureau’s creation has been controversial since it was first proposed in the early months of the Obama administration. It has drawn vigorous apposition from banking groups, Republicans and the U.S. Chamber of Commerce. Warren’s role has also stirred much dissent. The appointment effectively makes Warren the head of the bureau without forcing her to through a certain-to-be contentious Senate confirmation process.
Wall Street is wary of Warren, fearing her Bureau would slice into the profits of credit products, already strained by a depressed housing market, foreclosure crisis and new credit card reform laws that took effect this year. The Credit CARD Act already limits certain penalty fees.
The Bureau will have the authority to write rules to protect consumers from predatory, abusive or deceptive practices by banks and non-banks that offer consumer financial services or products, including mortgages, credit cards and payday loans. The financing arms of auto dealerships are exempt.
The bureau also will have the authority to examine and enforce regulations for banks and credit unions with assets of more than $10 billion; all mortgage-related businesses; and large non-bank financial companies, such as large payday lenders, debt collectors, and consumer reporting agencies. Banks with assets of $10 billion or less will be examined by the appropriate bank regulator.

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