Ah, country witticisms. I love ’em. They’re funny, and true.
So it is with the current debate surrounding the appointment of Harvard Law professor and consumer bankruptcy expert, Elizabeth Warren, to head the new Bureau of Consumer Financial Protection.
For consumers, who have been beaten up by the financial system in this country, the agency is one of the best things to come out the recent financial reform act.
“It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house,” she wrote in a now-famous 2007 article in the journal Democracy proposing such an agency. “But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street.”
It was Warren who dreamt up the idea and has been its champion. To think that anyone else would be considered as its first director is unfathomable. It’s a bit like telling the Wright brothers: Thanks, Wilbur. Thanks, Orville. Now hand us the keys. You’re not flying it.
Obviously Wall Street and its allies in the Senate are trying to torpedo her nomination. It makes perfect sense: When you can’t defeat the legislation creating the agency, then water down its effectiveness by getting a stooge for a regulator.
The lobbyists know Warren is a plain-spoken consumer advocate who’s not afraid to “tell it like it is,” such as taking the financial industry to task for the reams of fine print in contracts. She’s popular with plain folks and even been the inspiration for a recent rap video.
As a Washington, DC-area bankruptcy attorney, I have seen exploding adjustable rate mortgages that even I, with a law degree, training in finance, and former holder of a stockbroker’s license, have trouble understanding.
The agency’s first director is critical. The initial head will set the course for the agency and determining whether it will be an effective advocate for consumers, or a patsy for the financial industry.