Warren Praises ‘Strong’ FinReg Bill, Slams Auto Dealer Carve-Out
Earlier today, I participated in a call on financial regulatory reform with Heather Booth, the executive director of Americans for Financial Reform, Damon Silvers, a legal counsel for the AFL-CIO, and Elizabeth Warren, a Harvard Law professor and chair of the Congressional Oversight Panel for the Troubled Asset Relief Program.
This evening, the conference committee reconciling the House and Senate versions of the bills reconvened to tweak a final measure to win the last vote for passage. “We may be on the verge of enacting significant reform that changes the direction [after] years of deregulation,” Booth said, though stressing that thousands of lobbyists will continue to work to water down the new provisions.
Warren warned of the same, praising the “strong” bill but worrying about its weakening. “David has had a few good weeks,” she quipped, “but Goliath isn’t down for the count.” She too cautioned about the influence of lobbyists on the bill. “Lobbyists still hold big sway in Washington. I kept waiting for an incoming missile” — a provision weakening the bill — “and so far, that hasn’t happened. But even if this bill goes through, Wall Street’s army of lobbyists is not in retreat, and it will do what it can moving forward to continue blocking reform.”
Overall, she expressed confidence in the measure. “The bill reported out of conference committee is a strong bill, and it will go a long way towards ending the kind of abusive practices that brought our economy to its knees,” she said, focusing on the consumer-related provisions and the new Consumer Financial Protection Agency.
She slammed the carve-out for auto dealers that make car loans as particularly egregious. “I was disappointed to see the conference committee give a carve-out to auto dealers,” she said, noting there is “no good reason” that dealers that make auto loans should not have to comply with the same regulations as community banks making the same auto loans. “More importantly,” she said, “I’m shocked that car dealers are willing to say publicly that they want to have the legal right to hide tricks and traps [in their loans].”
Still, she argued, “Overall, the agency has the authority and the independence that it will need to fix the tricks and traps, to fix a broken consumer credit market.” She said its president-appointed director and independent funding as “inoculat[ing] it” from outside forces. She also said it has “very real enforcement teeth.” She says the CFPA “has the tools it will need to push the consumer credit market towards transparency and comprehensibility in consumer credit contracts, plain and simple.”