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The Consumer Financial Protection Bureau – A $500M
Dream or Nightmare?
Guest Speaker: Elizabeth Vale, director of external affairs for the Consumer Financial Protection Bureau (CFPB), former Business Liaison in the Obama White House during the passage of DFA; Managing Director Morgan Stanley. Harvard '76
DFA created the Consumer Financial Protection Bureau (“CFPB”), an agency dedicated to consumer protection for financial products by all providers. The genesis of this new bureau is credited to Harvard Professor Elizabeth Warren, who until recently was leading its implementation as an assistant to the President.
This new agency is not without significant controversy. First, it does not come cheap. In the age of budget deficits, the budget of this new agency is $500 million annually, taken from monies earned by the Federal Reserve which avoids the appropriations process.
Next the CFPB has the power to rewrite existing consumer protection rules – everything from mortgage lending to credit card statements – as well as create new ones. Its rules will cover all providers and it will enforce them against all lenders with assets of $10 billion or more. What will this new emphasis on consumer protection mean for traditional safety and soundness supervision? Was creating another agency the right answer? Was lousy consumer protection a cause of the crisis? What is the role of government in consumer protection? The politics around this new agency has prevented a director being confirmed and threatens to derail its mission.
http://www.consumerfinance.gov/ (the bureau only not the speaker)