tagged w/ Elizabeth Warren
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The next big political battle in Washington -– whenever the budget debate is declared over –- is likely to feature the Consumer Financial Protection Bureau and whether Elizabeth Warren will become its first official head.
Harry Hamburg/Associated Press
Elizabeth Warren, head of Consumer Financial Protection Bureau, told a House subcommittee on Wednesday, “We do not envision new rules as the main focus of how the C.F.P.B. can best protect consumers.”
But will this fight feature a classic left vs. right set-piece confirmation showdown in the Senate? Or it will it be resolved with cloaks and daggers closer to the White House – with Treasury Secretary Timothy F. Geithner working to prevent Professor Warren’s nomination, or her confirmation if she were nominated?
Ms. Warren was put in charge of establishing the agency by President Obama, but the Treasury retains the powers of the bureau until a permanent director is nominated and confirmed by the Senate — at which point the agency will fall under the authority of the Federal Reserve Board, while operating with a high degree of independence. The president has not yet nominated Ms. Warren to the post nor indicated if he will.
There is much to commend the left vs. right scenario. The Republicans, after all, want to argue that regulation is excessive in general and regulation of financial products is somewhere between unnecessary and dangerous for economic growth in particular.
This theme came up at times during the Dodd-Frank legislative debate on financial regulation last year, but it was largely lost in the larger and more confused conversation.
Now Representative Spencer Bachus, Republican of Alabama, the chairman of the House Financial Services Committee, has Ms. Warren firmly in his sights – with the mortgage settlement negotiations as the flashpoint.
In a recent letter to Secretary Geithner, Mr. Bachus said: “Reports about the role played by political appointees in the Treasury department — including those affiliated” with the Consumer Financial Protection Bureau, “an agency that does not yet have any regulatory or enforcement authority — raise further questions.”
No matter that the Consumer Financial Protection Bureau became involved only when the state attorneys general asked for advice. Mr. Bachus is taking the opportunity to follow up on what he said recently: “In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks.”
The industry is unhappy because the proposed settlement — or, you could say, its transgressions with regard to foreclosures — could cost them up to $20 billion.
Mr. Bachus would not have a direct voice in any nomination hearing, which is the purview of the Senate, but plenty of Republican senators share his views, including Richard C. Shelby of Alabama, the ranking minority member of the Senate Banking Committee. And The Wall Street Journal regularly joins in the chorus opposing Ms. Warren’s views.
Ms. Warren actually represents a much more nuanced view -– arguing that transparency and simplicity, from the perspective of customers, creates a more level playing field and is good for the industry.
Some community bankers seem to be on her side. She is also good at explaining this view, and a confirmation hearing would be the perfect place for the country to witness and hopefully participate in this discussion. (Read her recent speech to the Credit Union National Association or her testimony Wednesday to a House Financial Services subcommittee and make up your own mind.)
Read More Here...
http://economix.blogs.nytimes.com/2011/03/17/whos-afraid-of-elizabeth-warren/#more-104301The next big political battle in Washington -– whenever the budget debate is... more
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by Zach Carter, Media Consortium blogger
President Barack Obama’s decision to appoint Elizabeth Warren to set up the new Consumer Financial Protection Bureau (CFPB) couldn’t have come at a more critical time.
Over 44 million Americans were living in poverty last year. That’s the highest number on record. The Great Recession is taking a terrible toll on everyone outside the executive class, but policymakers have been reluctant to pursue an economic agenda that improves the lives of ordinary Americans.
The uniqueness of Warren’s new post raises plenty of questions, but it puts a fierce defender of the middle class in office at a time when the middle class most needs help.
So what exactly will Elizabeth Warren do?
As Annie Lowrey emphasizes for The Washington Independent, it’s not entirely clear what Warren’s new job will be or how long she will have it.
Consumer advocates have pushed hard to get Obama to name Warren the first director of the new CFPB. Obama, citing Senate confirmation hurdles, has instead charged Warren with setting up the agency as an adviser to both the Treasury Department and Obama himself. The post allows Warren to get to work setting up the agency, but not the power to start drafting regulations. It’s good to see her get a post on the Obama team, but we do not yet know how influential she will be.
Tim Fernholz sums up the pros and cons of Warren’s appointment in a piece for The American Prospect. There are very real drawbacks to the move. Confirming Warren for a permanent post as director of the CFPB will be harder next year—Democrats are likely to lose Senate seats in November.
It’s not impossible, but if confirmation was Obama’s chief worry, he’s only made it harder on himself by kicking the nomination down the road. This is true for whoever Obama picks—the bank lobby is going to scream about anybody other than a bank lobbyist, and Republicans are filibustering almost everybody Obama nominates to any post, including critical economic policy positions at the Federal Reserve.
Getting to work
But the new role also gets Warren on the economic policy team right away, and allows the agency to begin staffing up under her stewardship, even if it can’t draft regulations until a permanent director has been confirmed. There will finally be a strong voice on Obama’s economic team prioritizing household financial security above all else. That’s very good news.
Whatever the formal powers of Warren’s new post, we can be sure she’ll have a significant impact on policy making. Her current role as chair of the oversight panel for the Wall Street bailout was given almost no power at all by Congress, yet Warren has transformed it into the only real source of economic accountability in Washington, D.C. That’s no easy task, and we can expect similar courage and creativity from her as a member of Obama’s economic team.
What will the CFPB look like?
Warren herself seems to be pleased with the appointment. In a piece for AlterNet, Warren says that she “enthusiastically agreed” to take on the new position, and explains the vision for the CFPB:
“The new consumer bureau is based on a pretty simple idea: People ought to be able to read their credit card and mortgage contracts and know the deal. They shouldn’t learn about an unfair rule or practice only when it bites them — way too late for them to do anything about it. The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market.”
Sea change
That sounds common-sense, but it’s exactly opposite to the past three decades of deregulation. Reversing the damage caused by that anti-regulatory fervor has been extremely difficult. The Obama administration needs Warren’s voice now more than ever. In the early days of his presidency, Obama pushed through a stimulus plan that has prevented the middle class from falling completely off the map. But those efforts are expiring, and they haven’t been enough to prevent millions of families from sinking into poverty.
Alarming poverty rate
In a harrowing piece for The Nation, Kai Wright notes that more people are now impoverished than at any time since the government began tracking poverty data. The poverty rate rose to 14.3 percent, with 44 million Americans—roughly one in seven—living in poverty. More than one-third of black and Latino children are growing up impoverished.
So it’s no surprise that income inequality is also at its most severe in decades. As Kevin Drum notes for Mother Jones—for the past thirty years, more and more American wealth has been concentrated among the richest citizens. The richest 1 percent of U.S. earners are raking in 10 percent more of the national income today than they were at the start of the Reagan administration, while the poorest 95 percent have seen their share of the national income decline.
Numbers like these aren’t a fluke—they’re a direct result of policies that put the interests of Wall Street and other powerful corporate players ahead of the well-being of households. Nor were these policies adopted in a vacuum– Wall Street lobbied hard for the right to pillage our pocketbooks, and when it couldn’t rewrite the rules, it simply broke them while bank-friendly regulators looked the other way. Elizabeth Warren can’t fix all of this on her own, and she’ll surely face opposition from some members of Obama’s inner circle. But families couldn’t ask for a better advocate, and her appointment couldn’t come at a better time.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.by Zach Carter, Media Consortium blogger
President Barack Obama’s decision to... more
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Elizabeth Warren has been lining up her pieces in the Senate and White House (and even industry) as progressives rally around her candidacy to head the soon-to-be-born Consumer Financial Protection Bureau. Her biggest opponent, Chris Dodd, has spent the last several weeks whining about her inability to be confirmed. Suddenly, with that line of attack looking less and less salient, he’s shifted gears.
Senate Banking Committee Chairman Chris Dodd has for weeks called into doubt whether Elizabeth Warren can be confirmed to head the Consumer Financial Protection Bureau. But for the first time this week, Dodd has called into question whether she’s qualified for the job, reversing his earlier position.
“It isn’t just a question of being a consumer advocate. I want to see that she can manage something, too,” Dodd told the Hartford Courant.
That’s a far cry from what he told TPM and other reporters just weeks ago, when his only stated concern, based on his conversations with colleagues, was that Democrats may have a hard time rounding up 60 votes to confirm her.
“She’s qualified, no question about that,” Dodd said. “The question is whether she’s confirmable.”
Dodd claims he’ll support her if Obama nominates her, but it’s clear he’s leading the charge for Democrats who don’t want to step out on a limb and publicly take her on. He’ll be gone from the Senate in January, so he has nothing to lose by carrying water for corporatist, Wall Street-owned Dems. Or maybe his close proximity to Joe Lieberman is rubbing off.
Really, for a guy that could lay claim to a decent legacy in the Senate, he sure is going out as an asshole.
Fact is, if Obama wants to prove that the Financial Reform law is worth a damn, he needs to nominate Warren. And if she runs up against confirmation problems in the GOP-owned Senate (and they do own it, thanks to its broken rules), then he needs to recess appoint her.Elizabeth Warren has been lining up her pieces in the Senate and White House (and even... more
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Two more Senate Democrats climbed aboard the Elizabeth Warren bandwagon on Friday, signing on to a statement circulated by Sen. Al Franken encouraging President Obama to nominate the Harvard professor to lead the nascent Consumer Financial Protection Bureau, an entity she first proposed and helped shepherd through Congress.
The Progressive Change Campaign Committee and the P Street Project have been urging their membership to flood Congress with calls of support for Warren. Franken's statement gives advocates something to organize around. The group is also calling on citizens to sign a petition backing her.
Sens. John Kerry (D-Mass.) and Mark Udall (D-Colo.) have now gotten behind the effort. "Elizabeth Warren has proven that she is willing to stand up to Wall Street on behalf of consumers and is the logical choice to lead the Consumer Financial Protection Bureau," reads the statement they signed. "If appointed by President Obama, I would vote to confirm Elizabeth Warren to lead the Consumer Financial Protection Bureau."
On Thursday, Warren met with senior staff at the White House. "The President believes that Elizabeth Warren is a champion for middle class families and consumers and she, among others, is a strong contender for this position. The President has not yet made a decision and no announcement is imminent," said White House spokeswoman Amy Brundage.Two more Senate Democrats climbed aboard the Elizabeth Warren bandwagon on Friday,... more
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Las Vegas (CNN) – The woman many in the progressive community hope will be the first head of the new Consumer Financial Protection Bureau received a heroes welcome Saturday at the Netroots Nation convention.
Speaking at a seminar on building a progressive economic vision, Elizabeth Warren received a standing ovation as soon as she was introduced.
Warren, head of the congressional panel overseeing the government’s Troubled Asset Relief Program, is considered a strong advocate for the working and middle classes and has been one of the fiercest proponents of the new consumer bureau, a centerpiece of the financial reform bill signed into law earlier this week by President Obama.
Some in the administration privately oppose Warren because of her outspokenness and work on the bailout panel.
During her speech Saturday to several hundred activists, Warren laid out what she thought should be some of the priorities for the new bureau: be a strong advocate for families; base it on realistic views of the effects of regulation; and make sure the bureau can adapt to changing economic circumstances.
Her remarks also indicated how enthusiastic she is about changes the new bureau might mean for consumers. Specifically she pointed out this will be the first agency to be created in a wired world, and should create conditions whereby consumers and regulators can instantly talk to each other.
“The possibilities here are endless,” she said.
Warren also asked the audience to help shape the agency and to push ideas they have.
“I want to talk to people who have a voice, and that is why I came to talk to you,” she said. “I want to ask you to use your voice as a voice of conscience.”
Reviewing how often lobbyists had predicted they would be able to kill the new agency, Warren said there is a lesson in that for the future, as lobbyists will continue to try to limit its scope.
“We didn’t give up. We scratched and we built and we hung on,” she said.
She never directly referenced the possibility of being the bureau’s first administrator although other speakers did. But Warren did generally reference it at the end of her speech.
“One way or another I will keep fighting for the middle class,” she said.
Warren later appeared on a separate panel on the forgotten foreclosure crisis at which she was lauded as the mother and godmother of the consumer bureau by panelists.
“I really hope the Obama administration appoints her,” Sen. Jeff Merkley, D-Oregon, said. “My fingers are crossed. My toes are crossed.” The audience roundly applauded.
Warren then said thank you to the Senator.Las Vegas (CNN) – The woman many in the progressive community hope will be the... more
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President Obama will appoint the new director and among the people he is considering it Elizabeth Warren, the Harvard Law professor who heads the House Oversight Committee on the Troubled Assets Relief Program, created to save the nation's biggest banks during the economic crisis.
http://www.npr.org/templates/story/story.php?storyId=128710957President Obama will appoint the new director and among the people he is considering... more
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by Zach Carter, Media Consortium blogger
Image Courtesy of Flickr user New America Foundation, via Creative Commons LicenseWith the Wall Street reform bill finally cleared through Congress, activists and intellectuals are pushing hard to make sure that this bill isn’t the last word Congress utters about Big Finance. We need deeper and more robust reforms, but it’s also critical to ensure that the new bill is implemented as effectively as possible. Part of that means appointing officials with a proven record as robust reformers—people like Elizabeth Warren.
Too-big-to-fail lives on
What more do we need to keep Big Finance from ravaging the middle class? As Stacy Mitchell notes for Yes! Magazine, the bill Congress just signed off on doesn’t really address the core problems posed by our out-of-control banking system. Too-big-to-fail is alive and well, and lawmakers must push to break up the megabanks during the next legislative cycle or risk another economic calamity. Mitchell writes:
“Since the collapse, giant banks have only grown bigger and more powerful, and less responsive to the needs of the real economy. While the financial reform bill includes several worthwhile measures, it will not set the industry right or entail a fundamental alteration of its scale and structure.”
There are still some great reforms in the current round of legislation, among them the creation of a strong new Consumer Financial Protection Bureau (CFPB) to write and enforce rules on mortgages, credit cards, overdraft fees and more. The first person to head this new regulatory body will be tremendously important to its future. They will set the tone for the bureau’s operations and establish a culture that will define it for years to come.
Elizabeth Warren: The Obvious Choice
The most obvious pick to head the agency is Elizabeth Warren, who currently chairs the Congressional Oversight Panel for the Troubled Asset Relief Program. Warren has been a rare force of accountability for the Wall Street bailout. She’s also a capable and committed reformer. Her current post has almost no formal statutory power, but Warren has used a series of reports and hearings to publicize previously obscure failures on issues ranging from the AIG bailout to the unmitigated foreclosure crisis.
She also just happened to be the person who came up with the idea for creating a CFPB in the first place.
But while Warren is the top candidate for the post, she’s facing stiff opposition from the Treasury, as Annie Lowrey details for The Washington Independent. The source of the tension? Warren’s public criticisms of Treasury from her current position. In short, the Treasury is upset that she’s doing her job well.
Kevin Drum of Mother Jones also weighs in, calling Warren “the obvious choice” for the new CFBP role. A Warren appointment, Drum notes, would send a clear signal to voters that the Obama administration is serious about reining in financial excess. It would also demonstrate that President Barack Obama is actually paying attention to the concerns of the people who elected him in 2008.
A Strong CFPB Will Strengthen Economic Recovery
From a policy perspective, Warren’s long list of accomplishments on banking reform will be critical to the new CFPB, because financial abuses of consumers have not abated since the mortgage meltdown, despite widespread public condemnation.
As I emphasize for AlterNet, banks scored a total of over $38 billion in overdraft fees in 2009, while the industry’s combined profit for the year was just $12.5 billion. The problem is not only that banks are engaging in rampant predation, but that predation is their dominant line of business. Instead of making responsible loans to support the economy, finance is gouging the middle class with tricks and traps.
But current regulators have been extremely reluctant to do anything about this behavior. The CFPB needs a strong leader who can immediately put an end to these kinds of activities and coherently set the tone for the bureau’s future conduct. There is simply no candidate better qualified for the post than Elizabeth Warren—selecting anyone else would be a clear sign that Obama is not serious about reining in Wall Street.
Fighting fraud
Consumer protection is not the only arena that will need strong oversight in the coming years. We’ll also need aggressive prosecutions of financial fraud. On Thursday, Goldman Sachs agreed to pay $550 million to settle a fraud suit brought against the company by the SEC. The arrangement is something of a mixed bag—Goldman did not admit to any wrongdoing, but it did acknowledge that it mislead its investors, which is a very big liability for a Wall Street titan to take on. The admission will also make it much easier for Goldman to be successfully sued by clients who got a raw deal from the megabank.
But as Amy Goodman and Juan Gonzalez of Democracy Now! note in an interview with Rolling Stone reporter Matt Taibbi, the settlement is also largely a disappointment. If the SEC had pursued and received a verdict against Goldman, it may very well have extinguished the company altogether. But even more frightening, Taibbi notes, is that Wall Street is interpreting the deal to mean that the government will not pursue further prosecutions against financial fraud.
The financial crisis that reached a fever-pitch in 2008 was fueled by inadequate rules, but it was also largely a story of banks aggressively breaking the rules that did exist. At the most basic level, banks issued millions of fraudulent mortgages, then packaged those fraudulent mortgages into securities and sold them off to investors without telling them that the securities were fraudulent.
They also resorted to all kinds of wild tricks to artificially inflate the values of their assets and deceive the public about the scope of their potential losses. Fraud, in other words, was at the very heart of what went wrong during the housing bubble, and if the SEC and the Justice Department refuse to take action against other fraudsters, they will encourage future abuses.
As Mitchell of Yes! emphasizes, citizens can express their outrage by moving their money from banking behemoths to safe, community-oriented local banks. Breaking up the big banks will require federal action, but we can pressure policymakers into doing the right thing by changing our own economic habits. The sooner we do so, the better.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.by Zach Carter, Media Consortium blogger
Image Courtesy of Flickr user New America... more
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1. Consider waiting to get new credit cards until after Feb. 22 because new accounts are protected from interest rate increases for the first year. As issuers compete for new customers in the new reform law landscape, there may be good deals and offers for people with good credit.
2. For existing accounts, consider doing a balance transfer from higher interest rate cards to accounts with lower APRs. Some issuers are offering good customers balance transfers of at least a year. Remember that there is a cost of 3 percent or 4 percent of the amount transferred, so weigh that decision carefully. Also, take note of what the new interest rate will be AFTER the promotional period ends. If it's higher than the rate on the old card or only a few points lower, it may not be worth it to switch.
3. Have a Plan B backup card or two. Issuers can still lower your credit limit and close your account without advance notice. Make sure you have more than one card as a backup in case this happens to you and you need a credit card for emergencies.
4. Charge a small amount on those other cards every other month and pay it off in full when the bill comes. This avoids any dormancy fee that may be assessed and may prevent the company from closing the account for inactivity. Some issuers require a minimum amount of charging to avoid inactivity fees, so check your terms.
5. Young adults' access to credit will be restricted by the new law. For college students or anyone under 21 who is responsible with credit, the best move could be to get a credit card now while you still can on your own. After Feb. 22, you will have to get an adult (over 21) co-signer and may be asked to show proof you have the ability to pay.1. Consider waiting to get new credit cards until after Feb. 22 because new accounts... more
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The head of the Congressional Oversight Panel created in 2008 to oversee the TARP bank bailout says that President Obama's proposal on Thursday to limit both the size of the major banks and the risks in which they can engage is "very important."
Harvard law professor Elizabeth Warren told MSNBC's Rachel Maddow, "I head him say, 'We're going to break apart 'too-big-to-fail,' and we're going to have an answer so that every financial institution, if it makes big enough mistakes, if it takes big enough risks and loses, every one of them can, in the end, die.'"
"The financial institutions have pushed him hard," Warren said of the president. "They've pushed Congress hard. He's pushing right back. ... What I see is that the president is now going to go straight to the people, and he's not going to let deals be cut in the back room. ... The time is upon us. Either you vote for the banks, and you do it in a big public way, or you vote for the people."
Warren emphasized that even though TARP is winding down, the bailout has left us with "the reminder that 'You know, when it comes right down to it with these very large financial institutions, we will throw as many taxpayers under the bus as it takes to save them.'" She insisted, however, that Obama's reform proposals amount to a statement that "we just can't afford to do that any more."
"Without that," Warren remarked, "quite frankly, our economy just can't function. Those big banks really will own all of us."
Story continues below...The head of the Congressional Oversight Panel created in 2008 to oversee the TARP bank... more
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When a pitcher gets tired, starts throwing walks or being hit, most attentive managers take him out of the game. When policies break down, as in the case of the security system that failed to spot the alleged Christmas bomber, the president starts talking tough about the buck stopping here and orders to straighten out a failed system.
But when tens of thousands of workers, once again, lose their jobs, the people responsible get winked at, not wanked. The president is contrite, his rhetoric subdued, even as the recovery he keeps talking about goes south.
Yes, there needs to be a cabinet shake-up. It’s time to yank Treasury Secretary Timothy Geithner from the game, along with economic adviser Larry Summers. Their pro-bank, pro-Wall Street policies are failing. Isn’t it obvious? According to an AP investigation, their road construction projects have had no impact on the jobs crisis.
The establishment will lean toward a Republican to replace him like FDIC Chairman Sheila Bair, who has proven to be far more competent and outspoken than her counterparts.
Geithner acts like a stalking horse for the people responsible for the meltdown. It’s time to say sayonara, and appoint someone who has the people's interests at heart. There is no shortage of capable and committed Democratic economists who can replace him. How about Elizabeth Warren or Joe Stiglitz or Brooksley Born or Simon Johnson or even, for op-ed’s sake, Paul Krugman?
Even Wall Streeters know Geithner is a dead man walking.
(Opinion) If white collar crime was treated like blue collar crime, he'd truly be on Death Row. As I said in my last post on Geithner, he needs to be arrested.When a pitcher gets tired, starts throwing walks or being hit, most attentive managers... more
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A hearing on the efficacy of the bailouts? If you are a bailed out bank, you score high. If you are a citizen, you are still paying to be screwed ...A hearing on the efficacy of the bailouts? If you are a bailed out bank, you score... more
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In Elizabeth Warren's world, credit card contracts would be so simple a teenager could read and understand them in four minutes. Loans would be as easy to compare as toasters, and online credit scores would be free.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a.DEiDrOr.ms&pos=10In Elizabeth Warren's world, credit card contracts would be so simple a teenager... more
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Some top authorities on the consumer lending industry accepted FRONTLINE's invitation to weigh in with commentary on the industry, its range of products, and the debate about a new regulatory framework. This blog is part of a FRONTLINE/New York Times joint project, The Card Game, comprising a series of reports by the Times and a documentary by FRONTLINE, which airs Nov. 24th.Some top authorities on the consumer lending industry accepted FRONTLINE's... more
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The House Financial Services Committee passed a watered-down version of the proposed Consumer Financial Protection Agency Thursday morning.
In the words of Financial Services chairman Barney Frank: "We have restricted the CFPA from what the administration proposed."
The CFPA is largely the idea of Elizabeth Warren, the Harvard law professor who serves as the chair of the Congressional Oversight Panel for the TARP program, and who has long advocated for stronger consumer protections.
Read more at: http://www.huffingtonpost.com/2009/10/22/elizabeth-warren-speaks-w_n_329425.htmlThe House Financial Services Committee passed a watered-down version of the proposed... more
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Distinguished law scholar Elizabeth Warren teaches contract law, bankruptcy, and commercial law at Harvard Law School. She is an outspoken critic of America's credit economy, which she has linked to the continuing rise in bankruptcy among the middle-class. Series: "UC Berkeley Graduate Council Lectures" [6/2007] [Public Affairs] [Business] [Show ID: 12620]
This is an amazing lecture. She has her finger on the pulse of exactly what's wrong with the economy right now.Distinguished law scholar Elizabeth Warren teaches contract law, bankruptcy, and... more
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