President Obama today nominated former Ohio Attorney General Richard Cordray to be director of the Consumer Financial Protection Bureau. We caught up with Elizabeth Warren – the woman whose idea the bureau was, and who has helped set up the agency – to get her thoughts in something of an exit interview (though she isn’t leaving immediately).
JAKE TAPPER: What are two or three things that are different for American consumers today because of the work you’ve done?
ELIZABETH WARREN, ASSISTANT TO THE PRESIDENT AND SPECIAL ADVISOR TO THE SECRETARY OF THE TREASURY ON THE CONSUMER FINANCIAL PROTECTION BUREAU: We’ve got a real focus now with an agency in place on making prices clear, on making risks clear, on mowing down fine print and making it easy to compare one credit card to two or three others; one mortgage to two or three others. Now look, this is a slow process. It took a long time to break this market and its going to take some time to get it healed. But we’ve already started on the mortgage front. We have got a project under way to take a stack of mortgage documents and reduce them to a single page. We’ve started on the credit card front. We’re helping enforce getting some really lousy terms out of credit cards and working on ways to mow down the fine print and we’re getting ready to start a consumer complaint hotline on credit cards.
And that’s going to be the first of our complaint hotlines which are going to roll in over time. So there’s a real place for consumers to come when they have a problem with a credit issue. We’re out here fundamentally just to make this market one that’s honest. That means that ordinary families can enter it and feel like they understand what the terms of the deal are. They make good decisions on their own behalf. That’s what we want.
TAPPER: So nothing specifically has changed yet, but it’s all in the process of changing?
WARREN: Well, I don’t think I’d say nothing specifically has changed. We’ve actually started to see some movement in the industry. And I’ll give you a real example of that. I met last fall with CEOs of all of the big credit card issuers and I talked to them. They wanted to know what we were up to. And I said, “I’ll tell you what we’re up to: We want these credit card agreements that are shorter, easier to read, not written in language that you can’t tell where it comes from.” And, by golly, I got a call back about three months later from the CEO from one of the largest credit card companies and he just said, “I want you to know we’ve cut our agreement length in half and we’ve changed what’s called the readability score to make it easier for people to be able to understand this.” Now, does that get us all the way where we need to be? No. But it tells us we’re starting to move in the right direction. And that’s important and that’s real.
TAPPER: What are you most proud of — of the work you’ve done?
WARREN: I think the part I’m most proud of is that we took an idea that said there’s a system out there that’s broken –- there are 19 federal statutes administered by seven different agencies; everybody’s responsible and therefore nobody is responsible to the American consumer, no one is looking out for American families. And we took an idea and said, “You know what we can do? We can be more efficient, we can be cheaper, we can be more effective if we put this into one agency and then hold them accountable for getting the job done.” We’ve started that. We’re under way.
TAPPER: Now Senate Republicans are pushing for changes to the Consumer Financial Protection Bureau. You don’t think that those are good changes?
WARREN: I don’t get this. They’re pushing for changes — they want to rip the engine out of the car before anyone has even driven it around the block once. We had this fight. The fight went on for a year. It was over. There was a vote a year ago. And the vote was that the majority — 60 senators — voted in favor of having this Consumer Financial Protection Bureau — plenty of safeguards put in place, plenty of limits, but ultimately a strong, tough agency that can get the job done. Now there are 44 senators who just want to say, “You know, we don’t like that outcome. So we want to change it. We want you to rip the arms and legs off this agency.” Um, my answer is no. The agency is here to do a job, a job that desperately needs to be done, a job that Republicans and Democrats and libertarians and people who don’t care about politics at all care about — and that is being able to read their financial contracts, know what the price is, know what the risk is, not be overwhelmed with unreadable fine print. That’s what we’re headed [toward] and that’s what I want to see happen.
TAPPER: They want, instead of a director, I guess, they want a board to oversee?
WARREN: No, what they want to do is they just want to slow this thing up. They want to find another way to see if they can complicate it and keep it from moving forward and mire it in fighting. Let me be clear: There are more restrictions on this agency than any of the other banking regulators. We already have restrictions on our budget that none of the others have. We’re subject to a veto. No other agency, so far as I know, in government who can be vetoed by other agencies. There were real powerful safeguards that were put in place for the actions of this agency. And then the trade-off was you put a single director at the top because you want to try to get something done. Now, if ultimately your goal is to get nothing done, to stay with the old regulatory system where nobody is watching out for American families, then, sure, let’s come in and amend it some more, let’s put five people in charge, let’s put seven, let’s put 10. That will make sure we don’t get anything done.
TAPPER: Public Citizen put out a statement today saying that the banking industry did not want you to be running this bureau and essentially they said President Obama blinked. I know that you’re very supportive of Mr. Cordray, but would you liked to have run this bureau? Would you have liked to be nominated officially?
WARREN: I just want to be really clear about this: The reason we have an agency is because President Obama stood behind it. And all those fights and all those compromises that were put on the table over the last couple of years, he said no — strong independent consumer agency. The reason we don’t have a good strong director in place right now — whether it’s me or somebody else — I lay directly at the feet of those in Congress who voted against this agency to begin with and who are doing everything they can to stick a stick in the spokes to keep the wheels from turning.
TAPPER: You’re the one who came up with the idea from this journal from four years ago and there are a lot of progressives out there who are disappointed that the president didn’t nominate you.
WARREN: Let me put it this way: Of all the ideas that got published in academic journals like that, not so many make it into law. And of those that make it into law, not so often does the author of one of those actually get to come in and set the thing up, to really help build the DNA, to get the pieces together, to attract the right people. This has been an extraordinary opportunity, but this phase is over. It’s now time to be an agency that’s off and doing its business, and I am really happy to see somebody else run it. I never had ambitions long-term to be a Washington runner of agencies.
TAPPER: Former head of the Commodity Futures Trading Commission, Brooksley Born, former Federal Deposit Insurance Corporation director Sheila Bair, Elizabeth Warren. Do you see where I’m going with this? Is there something that this town has a problem with when it comes to women who are assertive running any of these financial agencies?
WARREN: I don’t know. I mean, it’s a hard question. I’ll just put it this way. I threw rocks before I ever got to this town and I’m not through throwing rocks now. So if there’re folks who don’t like what I do, so be it, but I’m still ready to fight.
TAPPER: There are a lot of liberals who want you to fight for the Massachusetts Senate seat. I assume you’re not going to be making any announcements right here, but do you think, if you ran, that you could beat Sen. Scott Brown, R-Mass.?
WARREN: I gotta tell you: I spent 14 hours a day for more than a year now trying to get the pieces together for this consumer agency and to get it up and running. I have focused on this with every brain cell I have. My immediate future? Take my little grandkids and grandnieces and nephews to Legoland.