Robin's Story & Andrew's Story: A New Bureau to Protect Consumers

Posted by White House

On July 21, 2010 President signed the Wall Street Reform bill into law. One part of that law created the new Consumer Financial Protection Bureau to protect and empower American consumers with the strongest consumer protections in history.

Elizabeth Warren, who is leading efforts to get the Bureau up and running, recently announced their new website and today, she'd like you to meet Robin Fox, a 7th grade science teacher from Rome, GA, and Andrew Giordano, a retired Vietnam veteran from Locust Point, MD -- a couple of Americans whose stories illustrate some of the unfair practices people have encountered and how the Consumer Financial Protection Bureau will work to prevent it from happening again.

Watch their stories:

Robin's Story: Arbitrary Rate Increases on Credit Cards

The Consumer Financial Protection Bureau will enforce the Credit CARD Act, which President Obama signed in 2009 to ban credit card issuers from arbitrarily raising rates on existing balances and other unfair practices. The CFPB will also be responsible for updating the credit card rules moving forward.

Andrew's Story: Unexpected Overdraft Fees

The Consumer Financial Protection Bureau will examine big banks to ensure that they are following the rules that now require banks to give consumers a real choice of whether to join overdraft protection programs for ATM and debit card transactions. The CFPB will update those rules to respond to changes in the marketplace over time.

Visit ConsumerFinance.gov to learn more about the Bureau and submit suggestions.

Standing Up the Consumer Financial Protection Bureau

Posted by White House

A few weeks ago, President Obama asked me to get to work starting the new Consumer Financial Protection Bureau. He was clear about his goal: Level the playing field for American families and fix the broken consumer credit market—and do it as quickly and effectively as possible.

Today, I’m in California to continue conversations with families, financial industry leaders, consumer advocates, and others about the challenges and opportunities of setting up the new agency. Over the past month, I have listened more than I have talked, and I have learned a great deal about the need for change and the places where change should come first.

While I am in California, a new layer in the conversations will begin. This morning, I will meet in Silicon Valley with technology industry leaders to solicit advice about building a state-of-the-art, 21st century agency that harnesses some new tools that exist in our hyper-connected and digital world. Tonight, I will deliver a speech at the University of California, Berkeley exploring key ways that information technology might be used to propel the consumer agency forward.

I think the tools that can be at the new agency's disposal will have at least three kinds of implications. First, information technology can help ensure that the new agency remains a steady and reliable voice for American families. The kinds of monitoring and transparency that technology make possible can help this agency ward off industry capture.

Second, technology can be used to help the agency become an effective, high-performance institution that is able to update information, spot trends, and deliver government services twenty-four hours a day, seven days a week. If we set it up right from the beginning, the agency can collect and analyze data faster and get on top of problems as they occur, not years later. Think about how much sooner attention could have turned to foreclosure documentation (robo-signers and fake notaries) if, back in 2007 and 2008, the consumer agency had been in place to gather information and to act before the problem became a national scandal.

And third, technology can be used to expand publicly available data so that more people can analyze information, spot problems, and craft solutions. When these data are made available – while also, of course, protecting consumer privacy, shielding personal information and protecting proprietary business information – a shared opportunity arises between the agency and people outside government to have a hand in shaping the consumer credit world.

I never forget the central mission of the new consumer agency: to level the playing field for American families in the marketplace for consumer financial products and services. The agency will have rule making authority and supervision powers, and it plans to use them. But I want to explore every tool that might repair the broken consumer credit market, and technology can play a key role in creating a more resilient agency and empowering consumers to engage in their own enforcement of market norms.

As with anything truly new, we will have to take some risks. But building this new agency gives us a chance to create a voice for families in Washington and to change the way Americans interact with government and their expectations of what government can do for them.

I look forward to more conversations.

What You Missed: Tuesday Talk with Elizabeth Warren

Posted by White House

This week we kicked off Tuesday Talks, a weekly live video chat, with Elizabeth Warren, who is leading efforts to set up the Consumer Financial Protection Bureau (CFPB) – one of the central aspects of the Wall Street Reform and Consumer Protection Act that the President signed in July.

Check out what you missed and join us next week.

Use the links below to jump directly to a question (questions are paraphrased).

• Opening remarks
• What exactly is your role and how will the average consumer benefit from your post?
• How will Wall Street Reform affect the middle class American?
• What advice do you have for students to remain optimistic in this tough economy?
• What are your thoughts on the new charges that the banking industry has introduced to offset the regulations put in place by Wall Street Reform?
• Who will be regulated, and what penalties will be enacted for violations?
• Where should consumers turn if they have issues with a financial product?
• Is the bureau taking action to address the recent mortgage foreclosure crisis affecting homeowners?
• What is your opinion on ‘personal responsibility’ versus ‘leveling the playing field’?
• Will the bureau merely be reactive to claims of abuse, or will it be proactive in checking out the behavior of financial companies?
• How will the CFPB help consumers and how can consumers help the CFPB?
• At what point do we penalize insurance companies that make huge profits but do not provide adequate services to the consumers that they insure?

Tuesday Talks: Elizabeth Warren on the Consumer Financial Protection Bureau

Posted by White House

We’re getting ready to kick off Tuesday Talks, a weekly live video chat on WhiteHouse.gov, with Elizabeth Warren, who is leading efforts to get the Consumer Financial Protection Bureau -- one of the central features of Wall Street Reform as explained in our animated video -- off the ground. “Basically, the Consumer Financial Protection Bureau will be a watchdog for the American consumer, charged with enforcing the toughest financial protections in history,” said President Obama in remarks announcing Warren’s role.

Join us for a talk with Elizabeth Warren on Tuesday, October 12th at 1:00 p.m. EDT.

• Ask your questions in advance on Facebook
• Watch the chat through WhiteHouse.gov/live
• Join the discussion live through the White House Facebook application

And tune in for Tuesday Talks all month:

Tuesday, October 19th at 1:00 p.m EDT: Talk with members of the President’s Committee on Arts and Humanities (PCAH), a committee that helps to underscore the civic, social, educational, and historical value of arts and humanities in the life of our nation.

Tuesday, October 26th at 1:00 p.m. EDT: Talk with Brian Deese, Special Assistant to the President for Economic Policy, on the economy.

West Wing Week: "Immeasurable Courage and Uncommon Valor"

Posted by White House

Welcome to West Wing Week, your guide to everything that’s happening at 1600 Pennsylvania Ave. This week, walk step by step with the President as he announces that Elizabeth Warren will lead the effort to get the Consumer Financial Protection Bureau off the ground, participates in a live CNBC town hall, awards Chief Master Sergeant Richard L. Etchberger, U.S. Air Force, the Medal of Honor posthumously for the valor he displayed in combat, travels to New York for the United Nations General Assembly and much more...

For more information on the events in this edition of West Wing Week, check out the links below:

Friday, September 17th, 2010

• The President Appoints Elizabeth Warren to Lead a "Watchdog for the American Consumer".

Monday, September 20th, 2010

• President Obama's Town Hall on the Economy, Business and the Middle Class.

Tuesday, September 21st, 2010

• The President Awards Chief Etchberger the Medal of Honor.

Wednesday, September 22th, 2010

• A Backyard Discussion on the Patient's Bill of Rights.

Thursday, September 23rd, 2010

• The President to the UN General Assembly: "We Can Say That This Time Will Be Different".

Republicans in Congress Push to End Consumer Protections, Let Wall Street Run Loose

Posted by White House

Yesterday afternoon, Senator Richard Shelby laid out very clearly what Congressional Republicans consider to be one of their major priorities – rolling back legislation that will provide more security and stability to middle class families, and more accountability to Wall Street. He joins the Republican Leader in the House who promised to try to repeal Wall Street Reform in July.

Senator Shelby wants to go back to a time when there was no such thing as a Consumer Financial Protection Bureau and when consumers were left without a voice at the table. This is an agency whose mission is to look out for American consumers and empower them with the clear and concise information they need to make the financial decisions that are best for them. Its existence is enormously important, because one cause of the financial crisis and the Lost Decade for the middle class was the unscrupulous practices of credit card companies and mortgage lenders, who reaped billions at the expense of consumers from hidden fees and penalties.

That's why the President fought so hard for the new CFPB and new rules to outlaw the tricks and traps that have punished the American people. That hard-won victory came over the fierce opposition of Wall Street and the financial industry. But now the man who would be chair of the Senate Banking Committee says that if Republicans win control of the Senate, he will work to gut these new consumer protections.

We hope Senator Shelby is prepared to explain why he feels that way to the millions of Americans who have been misled with pages and pages of fine print on applications for credit cards, mortgages or student loans, and now find themselves in untenable financial situations.

It’s important to understand that when Congressional Republicans talk about re-opening this legislation, they’re talking about standing up for the interests of big banks and their lobbyists and leaving middle class families to fend for themselves.

The Wall Street reform legislation is a clear victory for the American people. It will bring greater economic security to families and businesses across our country by enacting the toughest financial reforms since the ones created in the aftermath of the Great Depression, and by making Wall Street more accountable. And yet Senator Shelby wants to get rid of the progress we made and go back to a system that helped cause the financial crisis.

It’s become very clear that Congressional Republicans do not have any viable solutions to fix our nation’s problems. And the solutions they do offer, like repealing Wall Street reform legislation, will do absolutely nothing to grow our economy, put people back to work and strengthen America’s middle class. Instead, they would take us back to the same exact failed economic policies that created the mess we’re in: cutting rules for the special interests and big corporations and cutting the middle class loose.

President Obama's Town Hall on the Economy, Business and the Middle Class

Posted by White House

This morning the President took part in an unusual sort of town hall in conjunction with CNBC. The audience was made up of “CEOs, union workers, teachers and students” as host John Harwood put it, and the questions reflected a broad variety of perspectives on the economy and jobs in America.

In opening remarks, the President recounted the over-arching story of his Administration so far: how the Recovery Act and other emergency actions were responsible for millions of American jobs and brought the country back from the brink of another Great Depression.

But the President also made clear once again that the struggle is far from over for far too many families, and one of the first questions was about middle class families who are still feeling the squeeze not just of this recession, but of the past years and decades. The President talked about how, even as he’s worked to boost our recovery in the short term, he’s also focused on creating a new foundation for the country so the next generation won’t be squeezed the same way – reforming student loans, putting families in charge of their own health care, creating a Consumer Financial Protection Bureau dedicated solely to making sure families get a fair shake.

But the President didn’t ask for congratulations:

And so my goal here is not to try to convince you that everything is where it needs to be. It’s not. That's why I ran for President. But what I am saying is, is that we’re moving in the right direction. And if we are able to keep our eye on our long-term goal -- which is making sure that every family out there, if they’re middle class, that they can pay their bills, have the security of health insurance, retire with dignity and respect, send their kids to college; if they’re not yet in the middle class, that there are ladders there to get into the middle class, if people work hard and get an education to apply themselves -- that's our goal. That's the America we believe in. And I think that we are on track to be able to do that.

The President was asked a number of questions on the premise that he is somehow anti-business, a claim he simply needed to point to his record to refute (we’d certainly invite skeptics to search WhiteHouse.gov themselves):

Look, in every speech, every interview that I've made, I've constantly said that what sets America apart, what has made us successful over the long term, is we've got the most dynamic free market economy in the world. And that has to be preserved. That has to be preserved. We benefit from entrepreneurs and innovators who are going out there and creating jobs, creating businesses.

Government can't create the majority of jobs. And in fact, we want to get out of the way of folks who’ve got a great idea and want to run with it and are going to be putting people to work.

And on the ongoing debate about extending middle class tax cuts, the President laid out his fundamental thinking:

Here’s the basic principle. Here’s what I can’t do as President. I think I’ve worked pretty hard and I have a pretty big grasp of the challenges that we’re facing. (Applause.) But here’s what I can’t do. I can’t give tax cuts to the top 2 percent of Americans, 86 percent of that money going to people making a million dollars or more, and lower the deficit at the same time. I don’t have the math.

I would love to do it. Every -- anybody in elected office would love nothing more than to give everybody tax cuts, not cut services, make sure that I’m providing help to student loans, make sure that we’re keeping our roads safe and our bridges safe, and make sure that we’re paying for our veterans who are coming back from Iraq and Afghanistan. At some point, the numbers just don’t work.

So what I’ve said is very simple. Let’s go ahead and move forward on what we agree to, which is tax relief for 95 -- 97 percent of Americans. In fact, actually everybody would get tax relief, but just up to $250,000 a year more. And let’s get the economy moving faster, let’s get it growing faster. At some point in the future, if we want to have discussions about further lowering tax rates, let’s do so at a time when we can actually afford it.

The President Appoints Elizabeth Warren to Lead a "Watchdog for the American Consumer"

Posted by White House

The President began his remarks today in the Rose Garden laying out the motivation for what was to come:

Before we begin I just want to mention a report that was released by the Census Bureau yesterday about what happened to wages during the last decade. It revealed that between 2001 and 2009, the incomes of middle-class families fell by almost 5 percent.

The fact that the middle class has been chipped away at is well known, and obviously is not easily reversed. The economic crisis of the past two years has been devastating in itself, but was all the more tragic because so many middle class families had been pushed to the brink even beforehand. That's why the President was again tenacious in demanding that "the leaders of the other party to stop holding middle-class tax cuts hostage and extend this relief to families immediately." As the President has been explaining all week, Republicans in Congress have been refusing to allow an extension of middle class tax cuts unless there's also an additional tax cut for the wealthiest 2 percent of Americans -- an average of $100,000 for everybody making a million dollars or more per year.

But the news of the day was the announcement that Elizabeth Warren would lead the Consumer Financial Protection Bureau -- one of the central features of Wall Street Reform as explained in our animated video -- in getting it off the ground:

She’s a native of Oklahoma. She’s a janitor’s daughter who has become one of the country’s fiercest advocates for the middle class. She has seen financial struggles and foreclosures affect her own family.

Long before this crisis hit, she had written eloquently, passionately, forcefully, about the growing financial pressures on working families and the need to put in place stronger consumer protections. And three years ago she came up with an idea for a new independent agency that would have one simple overriding mission: standing up for consumers and middle-class families.

The President touched on some of issues the bureau will focus on:

Never again will folks be confused or misled by the pages of barely understandable fine print that you find in agreements for credit cards or mortgages or student loans. The bureau is going to crack down on the abusive practices of unscrupulous mortgage lenders. It will reinforce the new credit card law that we passed, banning unfair rate hikes and ensure that folks aren’t unwittingly caught by overdraft fees when they sign up for a checking account. It will give students who take out college loans clear information and make sure that lenders don’t game the system. And it will ensure that every American receives a free credit score if they are denied a loan or insurance because of that score.

Basically, the Consumer Financial Protection Bureau will be a watchdog for the American consumer, charged with enforcing the toughest financial protections in history.

Wall Street Reform & LinkedIn

Posted by White House

You know what will make you look important to all your connections on LinkedIn? Being connected to the White House.

OK, maybe not, but today we have a good example of why it’s still worthwhile. Earlier this week we posted a link to our animated explainer video on Wall Street Reform and asked what questions people had about it. Our group of 57,109 people has spurred a lot of great, involved discussions on issues like health care reform since we started up last year, and we got a lot of good questions this time too. Today Jen Psaki, our Deputy Communications Director (and one of our most prolific bloggers on this topic) stopped by to address some of the most common themes we saw in the discussion.

See all of her answers below – get connected to us to get in on the discussion next time, act fast and you could be lucky member number 57,110:

Answers to your questions on Wall Street Reform

Last week we asked for your questions on the recently-passed Wall Street Reform legislation. As usual, we’ve seen an interesting and insightful discussion here at LinkedIn, and we’re always grateful to get another snapshot of what the American people are thinking. We’ve looked through everything and I’ve posted responses to some of the key themes we saw from the conversation: http://linkd.in/cGHUE2

Nancy Brady: Who is The Bureau for Consumer Financial Protections responsible to?

The good news is that the Consumer Financial Protection Bureau (CFPB) is responsible to the American people. For far too long, the interests of consumers were represented by too many agencies and the purpose of the consumer bureau is to have one agency that stands up for consumers whether it is on mortgage contracts or overdraft fees, credit cards or the availability of simple financial information they need to make the best decisions for themselves and their families. The CFPB will be housed in the Federal Reserve, but it will have an independent director, an independent budget and independent rule-writing and enforcement authority.

Cherie Anderson: Why are we reforming Wall Street? They didn't cause the crisis.

Thanks Cherie. You are correct that all of Wall Street didn’t cause the crisis, but the irresponsible and reckless behavior of a few did contribute to the worst economic downturn since the Great Depression. The problem was Wall Street was not held accountable, large markets like the $600 trillion derivates industry grew and were left unregulated, and unfair and abusive practices in mortgages and other credit markets were left unchecked. The status quo was no longer sustainable.

We are working with the financial sector, including many businesses on Wall Street, to implement the financial reform legislation. The truth is putting new rules of the road in place is not only good for American families, it is also good for responsible businesses.

LaTisha Robinson: What is being defined here looks good. Although, as many people are saying, when does it really "trickle down" and help us?

This is one of the most important questions. There are many ways that this bill will help you LaTisha, and many Americans like you.

Here are a few examples:

Free Credit Scores: Far too many Americans are left scratching their heads when they are rejected for a loan or given a rate that is higher than they expected. Consumers will have a right to get a free credit score if they are turned down for credit or charged a significantly higher price than most other consumers because of their credit scores.

Unfair Mortgage Practices: As a result of the housing bubble, far too many Americans fell into loans that they could not afford. The Financial Reform bill provides strong, sensible protections for mortgages. It restricts a number of the unfair practices that fueled the housing bubble, including broker financial incentives to place borrowers in worse loans than they qualify for, prepayment penalties and lender pressure on appraisers. Lenders will not be able to make mortgages they know families cannot afford. The Consumer Financial Protection Bureau will also take steps to combine and simplify two overlapping Federal mortgage forms, and lessen the opportunity for brokers to use complicated forms to give borrowers loans they don’t need or enter into loans they can’t afford.

Overdraft Fees: The new CFPB will also enforce rules that give consumers a real choice of whether to join expensive overdraft programs. It will protect people like Andrew Giordano, a retired Vietnam veteran from Maryland who the President met last year. Andrew was saddled with hundreds of dollars in overdraft fees on his veteran’s account because his bank had automatically enrolled him in “overdraft” protection that he never asked for. The new CFPB will enforce new rules on overdraft programs to make sure that consumers like Andrew don’t get hit with these hidden fees.

John Nolan: Who "by name" are the people that will be controlling the Bureau?

The President has not made a decision yet about who will head the new Consumer Financial Protection Bureau, but there are a number of strong consumer advocates under consideration.
And in the mean time, we are doing everything possible to put as many important pieces of the bill in place as quickly as possible.

Mick Dalrymple: I have heard about limits on debit card interchange fees in the legislation. Does this include credit card fees?

This bill does impact debit cards. Merchants often pass these fees on to consumers and thanks to this law the fees will be limited to reasonable levels and merchants will be allowed to offer discounts for paying with debit cards rather than credit cards, since credit cards cost merchants more to process.