'GMA' Transcript: President Obama on Financial Reform, Elizabeth Warren and Shirley Sherrod

July 23, 2010 — -- U.S. President Barack Obama sat down for an interview with "Good Morning America" correspondent Elisabeth Leamy yesterday. The following transcript of their interview has been edited for clarity.

ELISABETH LEAMY: What I have here is the Wall Street Reform and Consumer Protection Act.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Don't hurt yourself.

LEAMY: And it is a thick one.

OBAMA: Right.

LEAMY: And we've counted. And 10 sections deal with things like derivatives --

OBAMA: Right.

LEAMY: -- and systemic risk and five talk about credit scores and mortgages.

OBAMA: Right.

LEAMY: Persuade me that this law matters to ordinary Americans.

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OBAMA: Oh, it -- it matters in so many ways. And -- and keep in mind, first of all, that this is building off a number of laws that we've passed during the course of the last 18 months that are directly addressing problems that consumers are experiencing.

So let me just give you some examples that I think your viewers will be familiar with.

When it comes to credit cards, this law says that we are going to have a single agency that's going to be able to enforce rules that prohibit hidden fees, that make sure that there's a 45 day notice period before a credit card company can jack up your rates; that if they're going to increase your rates, they can't increase those rates on the existing balances, only on future balances.

So right there, you've got a package of reforms and an enforcement mechanism so that people are going to be able to save money and plan their finances in a much more responsible way.

Some people may have also noticed that there are a number of changes that credit card companies have made on their statements, one in particular, a box that shows that if you -- just pay your minimum payment, if you're not paying your full payment, that it's going to cost you X amount more, essentially doing the interest calculation for you so that you can see it in a very clear way. Well, that wasn't something that the credit card companies just decided to do out of the goodness of their heart. They did it because we had passed a credit card reform law earlier and now we've got additional enforcement mechanisms for it.

Now, that's just on the credit card side.

On the mortgage front, we're going to be able to make sure that mortgage brokers are not steering you toward a more expensive mortgage because they're getting a hidden kickback from the mortgage issuer. There's going to be a standard of care, meaning that mortgage brokers have to operate in an honest and transparent way with you and if they don't, they're going to be subject to penalties.

So on mortgages, on credit cards, on student loans, on payday loans, on a whole host of credit issues, the consumers are going to now not only have more security and protection, but they're also going to have somebody whose sole job is to look out for them at the federal level and working with states' attorney generals and other consumer advocates.

And overall, I think what this is going to result in is people having more control over their finances and hopefully they're going to be saving money.

LEAMY: In fact, you called this the strongest consumer financial protection system in history. Sometimes that brings unintended consequences. And already the credit card companies are starting to bring back annual fees and the banks are doing away with free checking.

What kind of recourse do consumers have when that happens?

OBAMA: Well, one of the things that we encourage in this reform is just better information. So if you are able to shop online for the best fees and you know -- or the best deal from a credit card company, if you can go to a Web site and have somebody let you know -- I -- I get a better deal from that company than I do from this company, that's going to empower you. And -- and so much of what needs to be done in the consumer area is to empower the consumer so that they can make good choices -- they can make the best choices.

There are already good deals out there. You -- you know, you -- you make a -- a wonderful living helping people make good decisions. But what we want to do is to make that more widespread so that consumers have the information they need in order to look out for their families and their own interests.

LEAMY: You know, the law relies heavily on regulators to detect and deter problems.

OBAMA: Right.

LEAMY: But as an example, the SEC knew about Bernie Madoff. Whistleblowers had spelled it out.

OBAMA: Right.

LEAMY: And the SEC agency failed to act.

So I'd like to know, why do you think that this new agency and these new regulators will do any better?

OBAMA: Well, you're absolutely right that regulations are only as good as the regulators who are applying them. And what we have done is provided a framework in which we are assuring that the regulators have the power to scrutinize systemic risks in the financial system that could lead to another financial meltdown of the sort that we had, that are making sure that complex derivatives are in a open market, that people can see and can be monitored.