Head of new consumer agency sees path
Friday, October 29, 2010
Elizabeth Warren has talked early and often about molding the new Consumer Financial Protection Bureau into a nimble, sophisticated watchdog built for the 21st century.
The key to accomplishing that goal, as she sees it: information technology.
Warren said officials have a fleeting opportunity to "think about what it means to build a new agency in a world where information travels at the speed of light," according to prepared remarks for a speech Thursday evening at the University of California-Berkeley. "We can build a government agency that is responsive to the dynamics of our time, just as the town meeting responded to the 18th century and the classic government agency to the 20th. To get there, we need to reimagine the new consumer agency, using changes in technology to propel us."
Warren's trip out West was part of an ongoing effort to do just that. She sought out ideas during a visit to Google and over lunch with a dozen Silicon Valley executives. The visit came a week after a similar meeting with technology experts in Washington.
The outline Warren laid out in her speech Thursday was short on specifics, but she expressed little doubt about the kind of data-driven watchdog she envisions.
Traditionally, she said, financial firms have armies of lobbyists and lawyers monitoring every new regulation and aggressively pushing the industry's views on regulators. Consumers have little voice.
Warren said the new consumer bureau will use technology to interact much more intimately with regular Americans, soliciting input on their experiences with consumer credit products.
"The agency can empower a well-informed population to help expose, early on, consumer financial tricks," Warren said. "If rules are being broken, we don't need to wait for an expert in Washington to wake up. If we set it up right from the beginning, the agency can collect and analyze data faster and get on top of problems as they occur, not years later."
Warren suggested that tapping into such grass-roots data might have helped regulators prevent or alleviate the housing crash in 2008, as well as the recent foreclosure fiasco involving "robo-signers" and fraudulent court filings.
Each of those events has heaped anguish and economic hardship on millions of families. Warren, now more than a month into her tenure as the Obama administration's point person for shaping the new consumer watchdog, said she hopes a more modern and agile regulator can "plug a hole in the bottom of the economic boats" of many Americans.
"Technology," she said, "can force this agency to remain true to its goals."