Professor Elizabeth Warren submitted this Opinion piece to the Wall Street Journal yesterday. As the Chair of the TARP Congressional Oversight Panel, Professor Warren has been vocal about the need for increased consumer protections and has been a staunch supporter of the creation of a Consumer Financial Protection Agency. In this piece, she talks about the need for a CFPA and discredits J.P. Morgan CEO Jared Dimon’s recent comment that “crises should be expected ‘every five to seven years.'” She says:
He is wrong. New laws that came out of the Great Depression ended 150 years of boom-and-bust cycles and gave us 50 years with virtually no financial meltdowns. The stability ended as we dismantled those laws and failed to replace them with new laws that reflected modern business practices.
On the CFPA, she says:
The latest lie is that the CFPA is “big government.” The CEOs all know that the current regulatory structure, which they support, is big government at its worst: bureaucratic, unaccountable and ineffective. The CFPA will consolidate seven separate bureaucracies, cut down on paperwork, and promote understandable consumer products. In the process, it will stabilize the industry, rebuild confidence in the securitization market, and leave more money in the pockets of families. Complaining about short, readable contracts and efforts to slim down bureaucracy only further diminishes the banks’ credibility.