Elizabeth Warren and the Consumer Financial Protection Bureau: What Will They Do to Florida Banking and Florida Real Estate?
The brand new, shiny as a new penny Consumer Financial Protection Bureau is up and running now, with Harvard Law professor Elizabeth Warren at its helm. Look at the CFPB's nice, new website and it looks like Martha Stewart might be advising on both the design of the site as well as Professor Warren's hairstyle.
And the CFPB sounds so friendly and helpful, too. From the site:
The CFPB will work to ensure that financial companies make the true price clear to consumers so they can make the decisions that are best for them. Companies shouldn’t compete by figuring out how to fool you best. Transparency means that markets really work for consumers.... [and]
The CFPB will work to promote fair competition for depository and non-depository institutions, large and small. No one should be able to ignore the rules in order to take customers away from those who follow them.
Well, Elizabeth Warren and the CFPB, created by Title X of the Dodd-Frank Act, may not be so nice and sweet and wonderful. Particularly if you are in Florida, dealing with the current bad economy.
Bankers Do Not Trust Professor Warren and the Consumer Finance Protection Bureau
Financial experts in Florida and elsewhere are wary of this new agency, acting under the aspices of the U.S. Department of Treasury. This isn't news. Professor Warren has been criss-crossing the country, meeting with bankers to try and make friends. (There's even a map tracking her good will tour on the CFPB site.) Bankers don't trust this agency because it's not clear what the boundaries are with this agency. How much power does Elizabeth Warren have? Where is this all laid out, for everyone (including the CFPB) to reference?
As the Wall Street Journal reported last week, Sen. Richard Shelby of the Senate Banking Committee, has publicly criticized Elizabeth Warren and the CFPB of a “regulatory shakedown” of mortgage servicers in the recent settlement deal made by the coalition of all fifty state attorneys general, the FDIC, and the CFPB in the Foreclosure Fraud matter.
This month, Iowa Attorney General Tom Miller announced a settlement had been reached in the Attorneys General investigation of ForeclosureGate and a 27-page overview was released. Many banks, large and small, are unhappy with this proposal.
Senator Shelby opined to the media (and Congress) that according to the news media, Elizabeth Warren and other federal regulators were involved in these negotiations, and that rumors had it that around $30,000,000 was on the table as the amount that the banks must pay to settle the foreclosure claims the AGs are collectively advancing.
Senator Shelby is telling the WSJ that this big stash of cash isn't marked to help the homeowners who suffered from the ForeclosureGate mess. Senator Shelby is arguing that this massive amount of money is going into the hands of Warren and other executive agencies, so housing programs nixed by Congress can be funded.
And, where is the accountability of CFPB here? Can't find it. Seems that the CFPB has the power to take the money and run - and neither banks nor homeowners can do much to easily stop them.
Wall Street Journal Editorial Warns of Elizabeth Warren's Power Here
In an editorial published by the Wall Street Journal on March 15, 2011, entitled "More Mortgage Mischief," the Wall Street Journal provides perspective on Elizabeth Warren and this latest turn of events. With bold words -- extortion, fiat, stall -- the WSJ's point is clear: Elizabeth Warren's activity and this 27-page deal is scary.
The WSJ points not only to the Senator's concern about who gets this pot of gold from the ForeclosureFraud settlement, but to the language of the deal itself. There's big, broad liability language that it opines no CEO in good faith would agree to sign.
The WSJ also confirms its earlier worry that Dodd-Frank would result in the fed's attempt at controlling credit allocation has become a reality as part of this deal.
Bottom line, this isn't a good debut for Professor Elizabeth Warren and her agency. The ForeclosureGate settlement has the potential to be disastrous for the nation. And likewise, it's very, very dangerous for Florida banking, Florida business, and Florida real estate development.