(Bloomberg) Elizabeth Warren, the Harvard Law School professor appointed to help set up a new U.S. consumer watchdog, told Wall Street executives she wants to work with them to create clearer contracts for financial products.
"Instead of using ever more complex disclosures that drive up costs for lenders and provide little help for consumers, let's measure our success with simple questions," Warren, who was appointed this month, said in remarks prepared for a speech last night to the Financial Services Roundtable in Washington, which represents the nation's largest banks and insurance companies. "Can customers understand the product, figure out the costs and risks, and compare products?"
The financial-services industry lobbied against the new Consumer Financial Protection Bureau, saying it would raise costs, limit choice, and improperly separate oversight of consumer issues and safety and soundness. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon has said the agency would be "just a whole new bureaucracy."
Dimon, Citigroup Inc. General Counsel Michael Helfer, U.S. Bancorp CEO Richard Davis, and PNC Financial Services Group Inc. CEO James Rohr were expected to attend the dinner, according to an administration official. Other expected attendees included Anne Finucane, Bank of America Corp.'s chief strategy officer, and James M. Wells III, CEO of SunTrust Banks Inc.
Warren focused her remarks on seeking cooperation from bank executives to provide an "honest marketplace" for consumers.
Easy to Read"I'm here with you tonight because I want to be part of a discussion about how we can make the idea of a short, easy-to-read agreement a reality," Warren said.
"Good regulation is not about impeding market forces; it is about unleashing those forces to work better," she said. Rules should ensure that "straight-up competition actually works."
Warren, 61, is serving as President Barack Obama's assistant and as a special adviser to Treasury Secretary Timothy F. Geithner to help set up the bureau, a watchdog on products from credit cards to mortgages.
Warren's criticism of firms including Citigroup and insurer American International Group Inc. led business groups and Republican lawmakers to question whether Warren, who has never run a government agency or large company, could be an unbiased leader of the consumer bureau.
The bureau, created under the Dodd-Frank financial-overhaul act signed by Obama in July, will start with a $400-million budget. Its mandate includes guarding against exorbitant fees, confusing contracts and other "unfair, deceptive or abusive" practices. The agency has power to write regulations, extract information from companies, levy fines and authorize states to enforce its rules.