Elizabeth Warren « Main Street

The Elizabeth Warren Rap

Making the rounds, complete with miniature horses:

Tags: Consumer Financial Protection Bureau, Elizabeth Warren, financial reform, Wall Street

0 Comments By Laura Clawson At August 18, 2010 1:50 pm

“Blood and Teeth on the Floor” for a Consumer Financial Protection Agency

There’s another compromise coming down the pike.

Senate Banking Committee Chairman Christopher Dodd, a Democrat, and Republican Senator Bob Corker have worked on a bipartisan bill for weeks meant to overcome disputes on an issue of high importance to the Obama administration.

One source familiar with the Dodd-Corker talks said the two may announce an agreement on Friday and release a summary of the details of their deal next week.

One key component is to put a new government watchdog for financial consumers in the Federal Reserve, instead of making the watchdog an independent agency or housing it in another agency, two policy analysts said in a research note.

But independence is key, wherever the CFPA is located—that’s a requirement that cannot be compromised or consumer protection is compromised.

Elizabeth Warren:

“My first choice is a strong consumer agency,” the Harvard Law professor and federal bailout watchdog said in an interview with the Huffington Post. “My second choice is no agency at all and plenty of blood and teeth left on the floor.”

Paul Krugman:

I suspect that even Republicans, in their hearts, understand the need for real reform. But their strategy of opposing anything the Obama administration proposes, coupled with the lure of financial-industry dollars — back in December top Republican leaders huddled with bank lobbyists to coordinate their campaigns against reform — has trumped all other considerations.

That said, some Republicans might, just possibly, be persuaded to sign on to a much-weakened version of reform — in particular, one that eliminates a key plank of the Obama administration’s proposals, the creation of a strong, independent agency protecting consumers. Should Democrats accept such a watered-down reform?

I say no.

There are times when even a highly imperfect reform is much better than nothing; this is very much the case for health care. But financial reform is different. An imperfect health care bill can be revised in the light of experience, and if Democrats pass the current plan there will be steady pressure to make it better. A weak financial reform, by contrast, wouldn’t be tested until the next big crisis. All it would do is create a false sense of security and a fig leaf for politicians opposed to any serious action — then fail in the clinch.