Why does financial-reform advocate, Harvard professor and overall force of nature Elizabeth Warren want a Consumer Financial Reform Agency? It’s simple: “We stopped exploding toasters. We’re going to do the same with exploding mortgages and crazy credit cards.”
Speaking at the Consumers Union Advocacy Summit, Warren cited Consumer Reports as an inspiration for the new agency, and vowed to address car loans with “hidden kickbacks,” “free credit cards that cost $300” and “fees and charges you can’t see until it’s too late.”
Quoth Ms. Warren:
Consumer financial contracts don’t work like contracts are supposed to work. The way they work is by pretending something is one price and then giving you another. They work on incomprehensible fees and fine print. In a normal contract you see what you’re getting. I see what I’m getting. That’s the antithesis of what goes on in consumer financial products. The invisible hand of the market is withering an dying in this area. We need to shrink the legalese, make and make consumer financial products comprehensible and comparable to one another.
Warren has some ambitious goals for the new financial protection agency, and says that it would be better to walk away than accept a House/Senate compromise that just offers the weakest parts of the two bills.