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Warren extends olive branch to bankers

warrengeithner.JPG

U.S. Treasury Secretary Timothy Geithner listens to Elizabeth Warren, assistant to President Barack Obama and special adviser to Geithner on consumer protection issues, speak at a conference on mortgage disclosure last week.
(Photo Credit: Jay Mallin/Bloomberg)

By Brady Dennis
Elizabeth Warren has wielded a rhetorical sledgehammer against the nation's biggest banks in the past, chastising them for using "tricks and traps" to reap massive profits by deceiving their own customers.

But Wednesday evening, in her first speech as an Obama administration official and the de facto leader of the new Bureau of Consumer Financial Protection, she extended an olive branch to the 400 bankers gathered at the swanky Mandarin Oriental Hotel.

"Some of you may have noticed that I have not kept my opinions to myself about where I think the financial industry has gone wrong. And I notice that some of you have not kept your opinions to yourself about me," the 61-year-old Harvard Law professor said according to prepared remarks for the annual meeting of the Financial Services Roundtable, which represents the nation's largest financial firms.


"But there is something you may want to know: I come to Washington as a genuine believer in markets and a genuine believer that the purpose of regulating the consumer credit market is to make that market work for buyers and sellers alike."

She quoted from a speech that businessman Joseph P. Kennedy gave after he was appointed as the inaugural director of the Securities and Exchange Commission in the 1930s: "We are not working on the theory that all the men and all the women connected with finance, either as workers or investors, are to be regarded as guilty of some undefined crime. On the contrary, we hold that business based on good will should be encouraged."

The not-so-subtle message: Behave, play nice, and we'll get along just fine.

In her speech and in an interview earlier in the day, Warren said she hopes to take a more "principles-based approach" to regulation, rather than simply saddling companies with more of what she calls "thou shalt not" rules -- which make for burdensome, costly compliance and which banks often start trying to skirt as soon as they are written.

"Regulators can make more pronouncements from on high, identifying suspicious practices in the various markets and banning them. Or regulators can layer on more disclosure requirements," Warren said in her remarks. "But neither restores customer trust."

Rather, she said, "Let's measure our success with simple questions" -- Can customers understand a product? Do they know the risks? Can they easily figure out what it really costs?

The speech contained an understated but unmistakable challenge to those in the room to change their ways. Glimpses of the feisty Warren remained, such as when she noted that "too many Americans see dealing with banks like handling snakes - do it long enough and you'll get bit."

But mostly, this was a kinder, gentler approach. The group's president, Steve Bartlett, had invited Warren to speak at the meeting before President Obama named her to the lead role in shaping the new consumer agency, before she had an official title, before her words had to be vetted by the powers-that-be in the administration.

"She's on point for an issue we care about -- protecting consumers," the group's chief lobbyist, Scott Talbott, said in explaining the reason for asking her to be the keynote speaker.

Since taking the job earlier this month, Warren has reached out to chief executives, trade associations, members of Congress and consumer groups. She seemed Wednesday to be aiming for harmony among the warring factions, at least for now.

"It is now, right here at the beginning, that we have a remarkable chance to put aside misconceptions and preconceptions -- whether they are yours or mine. We have a chance to build something better," she said. "I'm here tonight to ask if we can work together."

Hours earlier, in her spartan office on the second floor of the Treasury building, Warren seemed hopeful but uncertain about how what kind of reception she might receive from the sea of bankers.

"This is the invitation to another approach, and we'll see what they say," Warren said, adding jokingly that, "I am going into a room where there are forks and knives on the table."

By Brady Dennis  | September 29, 2010; 9:01 PM ET
Categories:  *Economic agenda, Consumer Financial Protection Bureau, Financial regulation  
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Next: Economic agenda: Thursday, Sept. 30, 2010

Comments

Why U.S. regulators refused to regulate or even investigate Wells Fargo's lending practices? Wells Fargo teams up with its army of attorneys to defraud us.

Wells Fargo committed prosecutable crime against us. We lost our home. Something is wrong with this picture.

Here are the facts.

1. it is illegal for Wells Fargo to make mortgage loan to us based on hugely inflated appraisal.

Fact: - Wells Fargo's fraudulent appraisal valued our home at $718,000

- Wells Fargo's own review appraisal valued our home at $475,000

- Nevada Attorney General's office suspended the appraiser's license for committing appraisal fraud on our home.

- Nevada Appraiser Licensing Board mandated the appraiser to complete appraisal fraud course before regaining his real estate appraiser license.

- Nevada Revised Statue NRS 205.372 states that it's category C felony to make mortgage loans based on fraudulent appraisal.

- Cases of Attorney General's indictments against attorneys, loan brokers for teaming up make fraudulent loans to defraud homeowners.

2. it is illegal for Wells Fargo to wrongfully foreclose our home based on fraudulent appraisal and mortgage loan.

You can find all the facts on our website. www.wellsfargomortgagefraud.com.

Posted by: Anonymous | September 29, 2010 9:58 PM | Report abuse

You go Elizabeth,you have the whole country behind you. Don't take any BS from the crooks that stole everything that average joes have worked for. Do the job you have vowed to do and restore the middle class.

Posted by: walkman1956 | September 30, 2010 2:11 AM | Report abuse

I have a bad feeling about this.... Not you citizen Dennis. Anonymous's comment.
J. Diamond in the "snow"?

Posted by: deepthroat21 | September 30, 2010 3:00 AM | Report abuse

As Christina Romer, Larry Summers, et al slink ignominiously out of town, a new batch of liberal college professors with ZERO real-world experience rolls in.

As the old saying goes, insanity is defined as doing the same thing over and over, expecting different results.
.

Posted by: gitarre | September 30, 2010 6:15 AM | Report abuse

***As Christina Romer, Larry Summers, et al slink ignominiously out of town, a new batch of liberal college professors with ZERO real-world experience rolls in.***

except for the fact, of course, that elizabeth warren has been right about the rapacious behavior of the banksters from the beginning.

Posted by: mycomment | September 30, 2010 7:06 AM | Report abuse

I'm a college professor, with real-world corporate experience. May I come and clean this mess up for you?

I know, next you'll accuse me of being a left-wing socialist who's incapable of undestanding capitalism (wrong). Or a tree-humper who loves birds and bunnies more than people who have a right to get rich (I'm a dog person).

The issue is not academia or corporate experience. It's ethics. Elizabeth Warren is as far as we are going to get from corrupt corporate influence as a regulator. We need such people to pr0perly regulate markets. In addition to protecting consumers, they also tend to protect corporations from their own potentially bad behavior.

Posted by: Anonymous | September 30, 2010 7:45 AM | Report abuse

ZERO real world experience?

How about graduating from Rutgers Law School in 1976 after being the editor of the law review and not being able to get a job. At the time she was pregnant with her second child, She started up her own practice, handling wills and real estate closings.

Sounds pretty real world to me.

Posted by: furiouschads | September 30, 2010 7:48 AM | Report abuse

Just another wacko Obama appointee. These last two years of Barry's term are going to be L O N G.

Posted by: Desertdiva1 | September 30, 2010 8:41 AM | Report abuse

I wonder if Harvard is on retainer with the White House. It appears that when you need another socialist on the Obama Staff, Harvard is always ripe for the picking.

Posted by: Anonymous | September 30, 2010 8:55 AM | Report abuse

You were sneaked through the back door so you have no official power. The people did not have a say - only the naked emperor did. You are simply one in a long line of mistakes this disgustingly liberal administration continues to make. Don't bother decorating your office.

Posted by: Anonymous | September 30, 2010 10:27 AM | Report abuse

She lost me at Joseph P. Kennedy. Seriously, she is quoting one of the biggest thieves this country has ever been subjected to. He embodied the definition of corrupt; in bed with every gangster and politico with a strong-arm. lol. someone please stop this madness.

Posted by: Anonymous | September 30, 2010 10:57 AM | Report abuse

Playing nice with the bankers is no different than Obama's playing nice with the Republicans -- and look what that got him: one bad term.

Posted by: Anonymous | September 30, 2010 4:38 PM | Report abuse

Elizabeth Warren has the experience and knowledge needed to perform an excellent job. I know there is a lot of rhetoric against her, but as a life long republican and business conservative I find it interesting the financial groups are whining that she is going to misconstrue their intentions and take advantage of them. Whining about regulation done right by the people being regulated is the oldest game in town. She is trying to simplify the credit card and real estate markets so when you apply for a loan you understand the terms. Everyone who will ever need credit should be on her side.

Posted by: tommyokc | October 1, 2010 12:51 PM | Report abuse

Everything about Warren, from the way she attained her new powers to the way she plans to use them, is antithetical to our nation's First Principles and the United States Constitution. Warren's appointment is just the beginning of her assault. Her rejection of rules-based governing is also a rejection of our nation's First Principles.

Posted by: Anonymous | October 4, 2010 12:27 PM | Report abuse

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