Groups try to shape consumer bureau
TEXT OF INTERVIEW
BILL RADKE: The Consumer Financial Protection Bureau is on its way. Bureaucrats are setting up new rules
for banks and financial companies to live by while
lobbyists are trying to soften those rules,
so says Los Angeles Times consumer columnist David Lazarus. Good morning.
DAVID LAZARUS: Good morning.
RADKE: First of all, let’s remind listeners how this financial protection bureau is supposed to help or affect consumers.
LAZARUS: What it’s going to do is it’s going to consolidate the watchdog activities of about a half-dozen different government agencies all into one that will oversee mortgages, credit cards, payday loans — all manner of money stuff that affects consumers.
RADKE: And how are financial companies are trying to shape these new rules?
LAZARUS: They’re in the meat-and-potatoes phase, which means they’re devising all of the rules and regulations that will provide the rules of the road going forward. That’s where bank lobbyists are very busy right now, trying to give banks and lenders and other financial services companies as much wiggle room as possible for business as usual.
RADKE: And where are the key wiggle points right now?
LAZARUS: Well right now, they’re trying to make sure that the credit card reforms, for example, are going to have enough latitude to allow these companies to maintain fairly lucrative business practices, such as late fees and overdraft and all those sorts of things.
RADKE: And what do you think the agency’s new leader, Elizabeth Warren will do to counter those lobbyists?
LAZARUS: Well what they’re saying out of the gate is the credit card reforms are first and foremost. She needs to make sure that these are effective and strong and take away some of what some have called abusive practices by the banks and to do it quickly. After that, you kind of get a mixed bag. For example, predatory lending, some activists say she needs to focus on that. Others say mortgages are a key thing because of the housing market. She needs to streamline the mortgage process.
RADKE: And why are these activists so concerned about quick, quick, quick?
LAZARUS: The advocates I spoke to said Elizabeth Warren has about one year to prove the mettle of the new Consumer Financial Protection Bureau. Otherwise, if she can’t show that it’s effective and efficient, people will start saying — waste of money, bad for business. And the Republicans who have been very active in saying this is a bad thing will step up and say, “Look, we told you so.” So she’s going to have to come out of the gate with guns blazing.
RADKE: Keeping an eye on these consumer reforms for you, L.A. Times consumer columnist David Lazarus. Thank you.
LAZARUS: Thank you.
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