Elizabeth Warren Meets With Housing Advocates in Ohio
Elizabeth Warren, the Treasury and White House adviser helping to set up the Consumer Financial Protection Bureau, made her first trip yesterday to meet with housing advocates, visiting Columbus, Ohio. The event was closed to the press, but the AP reports that Warren stressed the importance of regulating payday lenders and other often-exploitative businesses:
“I think it’s powerfully important for this agency to be in touch with families across America in a real and sustained way, and for the agency to understand — really understand — the problems families are having with consumer credit products,” Warren said in her opening remarks. “That will be absolutely critical to its success.”
The new consumer agency, which will rewrite the rules for everyday products such as credit cards and mortgages, is a cornerstone of the Obama administration’s financial overhaul. The administration says it shows that its legislative agenda has produced real changes and hopes the agency will appeal to voters who are unmoved by changes to the complex rules governing Wall Street banks. [...]
Credit card disclosure, harassment of seniors for unverifiable debts and payday lending were among the topics discussed, said Suzanne Acker, a spokeswoman for the Coalition on Homelessness and Housing in Ohio. The meeting with Warren was hosted by the coalition, Americans for Financial Reform, and Policy Matters Ohio.
Apparently, Warren did not focus her address on the current foreclosure fraud crisis — despite Ohio being one of the hardest-hit states, and its attorney general and other officials hitting hardest back at banks. Why? Perhaps because the CFPB is not staffed, and is unable to start making and enforcing rules until the summer. But if it had been ready, would it have been able to help homeowners?
The CFPB cannot unilaterally make law, of course. But it could have helped. For instance, it could have empowered independent mortgage mediators, who help homeowners and banks negotiate new payment schedules. And it could have ensured that mortgage servicers follow the preexisting guidelines for how to help homeowners in default. (In the lead-up to the foreclosure fraud scandal, servicers often pushed homeowners into foreclosure too quickly, in contravention of the rules.)
Indeed, oversight of mortgage servicers is currently patchy, to say the least. But when the CFPB is set up, it will be able to put a leash on that important, underregulated part of the industry, even if a bit belatedly.