Standing Up on Behalf of Consumers

A year ago, in the wake of the financial crisis that pulled the economy into the worst recession we've seen since the Great Depression, President Obama passed financial reform to help tackle the problems that led us into the recession in the first place. 

As the President described today, the law did three things: "First, it made taxpayer-funded bailouts illegal, so taxpayers don’t have to foot the bill if a big bank goes under.  Second, it said to Wall Street firms, you can’t take the same kind of reckless risks that led to the crisis.  And third, it put in place the strongest consumer protections in history."

As part of financial reform, President Obama put one consumer watchdog, the Consumer Financial Protection Bureau, in charge with the sole task of "looking out for regular people in the financial system." 

The President got the idea from Elizabeth Warren, who has spent the past year setting up the bureau and starting the process of setting up protections for consumers – like making sure loan contracts and credit card terms are simpler and written in plain English and ensuring men and women in uniform are protected against fraud and deception in financial practices.

Today, President Obama nominated Richard Cordray as Director of the Consumer Financial Protection Bureau. In his remarks, the President spoke about the tens of millions of dollars lobbyists and lawyers have spent this year trying to undo progress by weakening the laws that protect consumers:

“The fact is the financial crisis and the recession were not the result of normal economic cycles or just a run of bad luck. They were abuses and there was a lack of smart regulations. So we’re not just going to shrug our shoulders and hope it doesn’t happen again. We’re not going to go back to the status quo where consumers couldn’t count on getting protections that they deserved. We’re not going to go back to a time when our whole economy was vulnerable to a massive financial crisis. That’s why reform matters. That’s why this bureau matters. I will fight any efforts to repeal or undermine the important changes that we passed. And we are going to stand up this bureau and make sure it is doing the right thing for middle-class families all across the country.

Middle-class families and seniors don’t have teams of lawyers from blue-chip law firms. They can’t afford to hire a lobbyist to look out for their interests. But they deserve to be treated honestly. They deserve a basic measure of protection against abuse. They shouldn’t have to be a corporate lawyer in order to be able to read something they’re signing to take out a mortgage or to get a credit card. They ought to be free to make informed decisions, to buy a home or open a credit card or take out a student loan, and they should have confidence that they’re not being swindled. And that’s what this consumer bureau will achieve.”

Also, in case you missed it, today Elizabeth Warren published an op-ed endorsing Richard Cordray’s nomination and discussing the Consumer Financial Protection Bureau’s transition this week to a real, live agency with the authority to write rules and supervise the activities of America’s largest banks.