WASHINGTON — The woman setting up the new Bureau of Consumer Financial Protection said the bureau will be a strong ally of credit unions that "want to work on behalf of their members."
Elizabeth Warren told CUNA's Governmental Affairs Conference that the bureau will have an ongoing dialogue with credit unions to ensure that credit unions can serve their members and not face more regulations. She said her bureau will combine TILA and RESPA rules, and this should simplify things for small lenders. Warren also promised that the bureau would seek to ensure that there are consistent rules and enforcement for nonbank lenders so that the financial service market can be a more level playing field.
Warren noted that if the rules require financial service providers to disclose all costs of their products up front, smaller institutions will benefit as will consumers. The bureau will issue regulations that will benefit middle-class families, many of which were hurt by the recession.
"These families played by the rules but were squeezed by an economic system tilted against them," she said.
Warren, who holds an endowed professorship at Harvard Law School, came up with the idea for the consumer agency. She has written extensively about bankruptcy issues and has been a frequent critic of what she sees as misleading practices by some large financial institutions and credit card issuers.
During her speech, she praised credit unions for championing the interests of consumers and said she wants to ensure credit unions can continue to do that for many years.
"Credit unions are an example of an institution that gives real value to consumers," she said. "Families won’t benefit if a few trillion-dollar financial institutions are the only ones that survive."
She noted that a credit union provided valuable counseling when her niece got into financial trouble.
And she thanked Harvard University Employees Credit Union President/CEO Gene Foley for teaching her about some of the products that credit unions offer their members and for educating her about credit unions and the credit union philosophy.
Warren also praised credit union pioneer Edward Filene for his efforts to advance the cause of credit unions and for advocating greater access to financial services for persons of modest means.
The new bureau, which was created by the financial overhaul bill passed last year, will be an independent agency housed in the Federal Reserve. It is scheduled to begin operating this summer.
President Obama hasn’t named a director of the bureau yet. Warren has been mentioned as a possible candidate, but it’s not clear if she could be confirmed.