Consumer Protection in an Age of Uncertainty: Opening Remarks (Day 1)

March 21, 2019 0:12:59
Kaltura Video

Michael Barr makes opening remarks for the conference Consumer Protection in the Age of Uncertainty. Hosted by the Center on Finance, Law, and Policy (CFLP). Learn more about the conference here. 

Transcript:

WELCOME TO THE UNIVERSITY OF


MICHIGAN'S FORD SCHOOL AND CFLP 


CONFERENCE ON CONSUMER 


PROTECTION IN AN AGE OF 


UNCERTAINTY.


FOR THOSE OF YOU WHO HAVE NOT 


MET BEFORE, I'M MICHAEL BAR, I'M


THE DEAN HERE AT THE FORD SCHOOL


OF PUBLIC POLICY.


WELCOME TO THOSE OF YOU WHO ARE 


LISTENING ONLINE AS WELL.


WE LOOK FORWARD TO A GREAT 


CONVERSATION TODAY.


WHAT I HOPE WE'RE GOING TO DO 


OVER THE NEXT TWO DAYS IS REALLY


HAVE A LOOK BACK AT WHERE WE'VE 


BEEN IN CONSUMER PROTECTION OVER


THE LAST DECADE.


AND HOPEFULLY ALSO LOOK FORWARD 


OVER THE NEXT TEN YEARS WHERE 


WE'D LIKE TO BE IN A WORLD WHERE


WE CAN BUILD A BETTER SET OF 


CONSUMER PROTECTIONS GOING 


FORWARD.


IF YOU THINK BACK TEN YEARS AGO 


WHEN PRESIDENT OBAMA CAME INTO 


OFFICE, OUR FINANCIAL MARKETS 


WERE FROZEN.


THE COUNTRY WAS LOSING JOBS.


WE WERE FACING THE WORST 


ECONOMIC CRISIS SINCE THE GREAT 


DEPRESSION.


AT THE END OF 2008, THE 


BEGINNING OF 2009, OUR NATION 


WAS LOSING 800,000 JOBS A MONTH.


WHICH WAS JUST DEVASTATING TO 


BUSINESSES, TO WORKERS, TO 


FAMILIES, TO HOUSEHOLDS ALL OVER


THE COUNTRY.


MANY OF US WHO ARE HERE OVER THE


NEXT TWO DAYS WERE IN GOVERNMENT


TOGETHER IN TWINE AND 2010, AND 


WE WERE FOCUSED NOT ONLY ON 


TRYING TO REPAIR THE ECONOMY, 


BUT ALSO ON THE URGENT 


OBLIGATION TO FIX THE FAILURES 


IN THE FINANCIAL SYSTEM THAT 


HELPED TRIGGER THE CRISIS IN THE


FIRST PLACE.


THE FAILURES THAT LED TO THAT 


CRISIS HAD MANY CAUSES.


REGULATORS.


HOUSEHOLDS TOOK ON RISKS THEY 


DIDN'T UNDERSTAND.


LEGAL LOOPHOLES AND REGULATORY 


GAPS ALLOWED LARGE PARTS OF THE 


FINANCIAL SECTOR AND MARKETS TO 


REALLY AVOID THE KIND OF 


OVERSIGHT AND TRANSPARENCY AND 


RESTRAINT THAT WAS NEEDED.


THERE WASN'T ENOUGH CAPITAL IN 


THE FINANCIAL SYSTEM TO PROTECT 


AGAINST LOSSES.


AND IN MANY WAYS, WE TRIED TO 


ADDRESS ALL THOSE CONCERNS TO 


THE BEST OF OUR ABILITY IN THE 


DODD-FRANK ACT.


AND I THINK IT DID PROVIDE IN 


MANY WAYS A STRONG FOUNDATION TO


BUILD A MORE STABLE AND 


RESILIENT FINANCIAL ESTIMATE.


ONE THAT PROTECTS CONSUMERS AND 


INVESTORS.


THAT IS ABLE TO ADAPT AND EVOLVE


WITH CHANGES IN THE FINANCIAL 


MARKET.


I THINK, HOWEVER, THAT THAT 


FOUNDATION IS AT EXTREME RISK 


TODAY.  AS MANY OF THE REFORMS 


PUT IN PLACE IN THE WAKE OF THE 


LAST FINANCIAL CRISIS ARE BEING 


ERODED AND NEW RISKS ARE 


EMERGING THAT ARE GOING 


UNADDRESSED.


SO WE'RE HERE TO REALLY TAKE 


STOCK OF WHAT HAS BEEN 


ACCOMPLISHED SO FAR.


WHAT WORK IS STILL LEFT TO DO.


WHAT PROGRESS IS BEING STYMIED.


WHAT REPAIRS WILL BE NEEDED IN 


THE FUTURE.


AND HOPEFULLY ALSO WHAT BOLD NEW


IDEAS WE SHOULD PURSUE IN A NEW 


LANDSCAPE.


FOR THE NEARLY 1 AND 7 AMERICANS


WHO LIVE IN POVERTY OR THE 


MILLIONS OF AMERICANS WHO FEAR 


FALLING OUT OF THE MIDDLE CLASS,


THESE FAMILIES WERE REALLY ILL 


PREPARED TO HANDLE THE SHOCK OF 


THE DEEP RECESSION.


THEY HAD LITTLE OR NO SAVINGS TO


FALL BACK ON AND STOOD ONE MAJOR


MEDICAL EMERGENCY FROM A 


PERSONAL ECONOMIC CRISIS.


THEY HAD NO FINANCIAL SLACK.


WHEN THE FINANCIAL CRISIS HIT IN


OVER LEVERAGED AND UNDER 


RESOURCES.


THE FEDERAL GOVERNMENT IN MANY 


WAYS HELPED CUSHION THAT IMPACT,


BUT THE HOUSEHOLD STILL FACED 


HUGE SETBACKS.


AND FOR MANY OF THESE FAMILIES, 


THEY HAVE NOT FULLY CRISIS TEN YEARS AGO.


WHAT THESE FAMILIES WERE AND ARE


NOW SEEKING IS SOME MEASURE OF, 


I THINK, FINANCIAL STABILITY.


GOING FORWARD, AMERICAN FAMILIES


WILL UNDOUBTEDLY NEED TO TRY TO 


SAVE A LARGER SHARE OF INCOME 


AND BORROW MORE RESPONSIBLY.


BUT HOUSEHOLD SHOULD NOT BE LEFT


ON THEIR OWN TO NAVIGATE A 


FINANCIAL SYSTEM THAT HAS BECOME


INCREASINGLY DETACHED FROM THEIR


EVERY DAY NEEDS.


ONE OF THE CRITICAL WAYS WE CAN 


HELP PROMOTE ECONOMIC SECURITY 


IS BY MAKING CONSUMER FINANCIAL 


MARKETS WORK BETTER FOR AMERICAN


FAMILIES.


LOW AND MODERATE INCOME 


INDIVIDUALS OFTEN LACK ACCESS TO


BASIC FINANCIAL SERVICES THAT 


COULD HELP THEM COPE BETTER WITH


A LACK OF FINANCIAL SLACK IN 


THEIR LIVES.


FACING SERIOUS ECONOMIC AND 


STRUCTURAL CONSTRAINTS, THESE 


HOUSEHOLDS TURN TO A VARIETY OF 


FORMAL AND INFORMAL INSTITUTIONS


TO MEET THEIR FINANCIAL SERVICES


NEEDS.


TO RECEIVE THEIR INCOME, TO PAY 


THEIR BILLS, TO BORROW AND TO 


SAVE.


BUT THE WAY OUR FINANCIAL SYSTEM


IS STRUCTURED OFTEN MAKES


TRANSACTING, SAVING AND 


BORROWING MORE EXPENSIVE AND 


LESS USEFUL FOR THE FAMILIES, 


THE FAMILIES WHO NEED IT THE 


MOST.


SO AT THIS CONFERENCE, WE'RE 


GOING TO BE TALKING A LOT ABOUT 


FINANCIAL ACCESS.


WE'LL ALSO BE SENDING A LOT OF 


TIME TALKING ABOUT THE CFPB.


THOSE OF YOU WHO ARE FAMILIAR 


WITH THAT LANDSCAPE KNOW THAT IN


THE LEADUP TO THE CRISIS, OUR 


FINANCIAL SYSTEM WAS LARGELY 


INCAPABLE OF SUPPORTING A 


SUCCESSFUL REGULATORY STRUCTURE 


FOR CONSUMER PROTECTION.


FRAGMENTATION OF RULE WRITING, 


SUPERVISION AND ENFORCEMENT MADE


IT IMPOSSIBLE TO CREATE A 


COMPREHENSIVE AND WELL 


CALIBRATED CONSUMER PROTECTION 


SYSTEM.


JURISDICTION AND AUTHORITY FOR 


CONSUMER PROTECTION WAS SPREAD 


OVER MANY FEDERAL REGULATORS.


ALL OF WHOM HAD HIGHER 


PRIORITIES THAN PROTECTING 


CONSUMERS.


BANKS COULD CHOOSE THE LEAST 


RESTRICTIVE SUPERVISOR AMONG 


MANY PROVIDERS.


MANY DIFFERENT BANKING AGENCIES.


AND A LARGE NUMBER OF NON-BANK 


PROVIDERS FROM HOME MORTGAGE 


ORIGINATORS TO PAYDAY LENDERS 


ESCAPED ANY MEANINGFUL 


SUPERVISION COMPLETELY.


WITH THE CREATION OF THE 


CONSUMER FINANCIAL PROTECTION 


BUREAU, WE HAD A CHANCE AND 


STILL HAVE A CHANCE TO DO MORE 


THAN PLAY CATCH UP IN REGULATING


CONSUMER FINANCIAL MARKETS.


THE BUREAU PROVIDED A HISTORIC 


OPPORTUNITY TO BUILD A 


SUCCESSFUL REGULATORY STRUCTURE 


FOR CONSUMER PROTECTION.


ONE THAT IS DESIGNED TO PROMOTE 


FINANCIAL INCLUSION, PRESERVE 


CONSUMER CHOICE, PROVIDE FOR 


MORE EFFICIENT AND INNOVATIVE 


MARKETS FOR CONSUMER FINANCIAL 


MARKETS.


AND A CONSUMER FINANCIAL 


PROTECTION BUREAU PROVIDED FOR 


THE FIRST TIME A CONSUMER AGENCY


WITH THE NECESSARY MISSION 


FOCUS, MARKET-WIDE COVERAGE AND 


CONSOLIDATED AUTHORITY.


AS WE'LL HEAR FROM MANY OF OUR 


SPEAKERS UNDER ELIZABETH WARREN,


UNDER RICH CORDRAY, UNDER MANY 


SPEAKERS TODAY, THEY GOT A LOT 


DONE.


PREPAID LENDING, CREDIT CARDS, 


A


ARBITRATION AND THE LIKE AND 


TOUGH ENFORCEMENT THAT BROUGHT 


IN FEES AND RESTITUTION.


BUT TODAY MUCH OF THAT WORK IS 


AT RISK.


REFORMS IN SOME RESPECTS HAVE 


BEEN WEAKENED.


AND THERE'S A REAL CONCERN ABOUT


THE DIRECTION OF THE AGENCY 


TODAY.


WE'LL HAVE SEVERAL PANELS 


FOCUSED ON THE CFPB'S PAST AND 


FUTURE, AS WELL AS ON THE KEY 


CONSUMER FINANCE MARKETS AND HOW


TO MAKE PROGRESS.


WE'RE ALSO GOING TO BE TALKING 


ABOUT INVESTOR PROTECTION.


THERE ARE A HOST OF ISSUES HERE 


FROM REFORMS IN THE MORTGAGE 


MARKETS TO CLEANING UP 


DERIVATIVE RULES, BUT WE THOUGHT


WE WOULD FOCUS TODAY AND 


TOMORROW ON ONE PARTICULAR LONG 


STANDING PROBLEM.


ADVICE PROVIDED TO INVESTORS BY 


THEIR BROKERS.


WE'LL ALSO BE HEARING A LOT 


ABOUT STUDENT LOANS AND ISSUES 


WHICH ARE REALLY ISSUES NEAR AND


DEAR TO MANY OF OUR STUDENTS AND


MANY OTHERS IN THE AUDIENCE.


WHAT PROTECTIONS HAVE WORKED?


WHAT CRISIS LIE AHEAD?


AND WHAT CAN WE DO TO REDUCE THE


RISK OF THEM GOING FORWARD?


THE FINANCIAL CRISIS LED TO 


FUNDAMENTAL REFORMS OF OUR 


FINANCIAL SYSTEM, BUT THE 


PROCESS OF REFORM IS NOT OVER.


AMERICAN FAMILIES CAN ILL AFFORD


A FINANCIAL SYSTEM THAT IMPOSES 


UNNECESSARY COSTS, CONFUSION AND


COMPLICATIONS ON THEIR DAILY 


LIVES.


OUR COUNTRY MUST TAKE THE STEPS 


NECESSARY TO ENSURE THAT THE 


FINANCIAL SYSTEM WORKS BETTER 


FOR EVERYONE.


AND THIS CONFERENCE WILL HELP US


MOVE THESE ISSUES FORWARD.


I'M THRILLED TO WELCOME SO MANY 


DISTINGUISHED SPEAKERS FROM A 


WIDE VARIETY OF BACKGROUNDS, 


INCLUDING MANY OLD FRIENDS.


WE HAVE AN OUTSTANDING GROUP OF 


SPEAKER AND PANELISTS JOINING US


OVER THE NEXT FEW DAYS, MARKET 


MAKERS, POLICY MAKERS, RULE 


ENFORCERS, WHAT JOHN LEWIS WOULD


CALL PEOPLE WHO MAKE GOOD 


TROUBLE.


AND I'M ALSO ESPECIALLY 


DELIGHTED TO THANK OUR KEY NOTE 


SPEAKERS, FOUNDING CFPB DIRECTOR


RICH CORDRAY WHO WE'LL HEAR FROM


OVER LUNCH.


OUR SPEAKERS WILL TAKE UP A WIDE


VARIETY OF ISSUES OVER THE NEXT 


TWO DAYS.


I'M REALLY HAPPY TO WELCOME YOU 


HERE.


BUT BEFORE WE GET UNDER WAY, I 


WANT TO TALK A LITTLE BIT ABOUT 


SOME LOGISTICS FOR THE NEXT 


COUPLE OF DAYS.


WE'RE GOING TO STAY IN THIS ROOM


FOR THE KEY NOTE AND PANEL 


DISCUSSIONS WITH COFFEE AND 


SNACK BREAKS OUT IN THE GREAT 


HALL OUTSIDE THESE DOORS.


AT THE END OF EACH KEY NOTE OUR 


PANEL CONVERSATION, WE'RE GOING 


TO OPEN THE FLOOR TO QUESTIONS.


WE'RE VIDEO RECORDING TODAY'S 


CONFERENCE AND WE'LL BE LIVE 


STREAMING IT AS WELL.


WELCOME TO THOSE OF YOU WHO ARE 


WATCHING ONLINE.


LET ME JUST SAY FOR THOSE OF YOU


WHO ARE HERE BUT HAVEN'T 


REGISTERED, IF YOU WOULDN'T MIND


IN THE COFFEE BREAK GOING OUT 


AND REGISTERING SO THAT WE CAN 


KEEP IN TOUCH WITH YOU AND YOU 


CAN GET ACCESS TO THE MATERIALS 


THAT COME OUT OF THE NEXT COUPLE


OF DAYS OF DISCUSSION.


OUR KEYNOTE SPEAKER RICH 


CORDRAY IS GOING TO SPEAK AT 


LUNCH, AS I MENTIONED.


WHEN LUNCH TIME COMES, WE'RE 


GOING TO ASK YOU TO MOVE OUT TO 


THE GREAT HALL PRETTY QUICKLY.


BRING YOUR LUNCH BACK IN PRETTY 


QUICKLY AND SIT HERE AND EAT IN 


THE AUDITORIUM SO WE CAN HAVE 


THE FULL AMOUNT OF TIME WITH 


RICH.


THOSE OF YOU WHO ARE SITTING IN 


THE BACK ROWS, YOU'LL SEE LITTLE


TABLETOPS YOU CAN PULL UP.


SO YOU DON'T NEED TO EAT ON YOUR


LAP.


THOSE OF YOU IN THE FRONT, YOU 


CAN CERTAINLY MOVE TO THE FRONT 


IF YOU'RE SITTING IN THE BACK, 


AS I ALWAYS TELL MY STUDENTS.


BUT PLEASE GET ORGANIZED QUICKLY


OVER LUNCH.


RESTROOMS ARE OUT THE DOOR TO 


THE RIGHT AND AROUND THE CORNER 


NEAR THE ELEVATORS.


THOSE SHOULD BE EASY TO FIND.


LASTLY, I HAVE QUITE A NUMBER OF


THANK YOUS TO GIVE BECAUSE AN 


EVENT LIKE THIS TAKES QUITE A 


NUMBER OF PEOPLE TO PULL OFF.


LET ME START BY THANKING ALL OF 


THE SPEAKERS.


ALL OF YOU WHO ARE SHARING YOUR 


TIME AND EXPERTISE WITH US 


TODAY.


THE CENTER ON FINANCE LAW AND 


POLICY IS WORKING WITH THE FORD 


SCHOOL OF PUBLIC POLICY ON THIS 


EVENT.


SO I'M THANKFUL TO MYSELF FOR 


CO-SPONSORING THE EVENT.


 [ LAUGHING ] 


>>  I WANT TO THANK A NUMBER OF 


OUR STUDENT GROUPS WHO ARE 


WORKING WITH US.


AFFORDABLE MICHIGAN, THE 


BANKRUPTCY LAW SOCIETY.


THE BUSINESS LAW ASSOCIATION, 


THE CONSUMER ADVOCACY AND 


FINANCIAL REGULATION AND 


MICHIGAN FINNTECH.


YOU'LL SEE MANY STUDENTS OVER 


THE NEXT COUPLE OF DAYS.


LET ME THANK IN PARTICULAR THE 


CENTER ON FINANCIAL AND POLICY 


STAFF KRISTI BEAR WHO YOU'VE 


BEEN CORRESPONDING WITH AND 


TRACY VANDEUCEN WHO YOU'VE BEEN 


CONNECTING WITH AS WELL.


THEY DO EXTRAORDINARY WORK TO 


MAYOR THIS EVENT HAPPEN.


I ALSO WANT TO THANK FORD SCHOOL


STAFF WHO ARE WORKING WITH US IN


ADDITION TO THEIR DAY JOBS 


HELPING OUT WITH THIS 


CONFERENCE.


TOM COOK, BILL KELLY, ERIK, 


BONNIE ROBERTS.


I ALSO WANT TO THANK THE FORD 


SCHOOL COMMUNICATIONS TEAM LORA 


LEE, CHRIS MEYERS, BECKY MULLEN 


AND NICK FOST.


WE ALSO WOULD LIKE TO THANK 


FINANCIAL SUPPORTERS OF THE CFLP


IN THIS CONFERENCE.


UNIVERSITY OF MICHIGAN ALUMNI 


PAUL LEE, JOHN LOOMIS AND BILL 


MARCOO.


LET ME THANK ALL OF THE RESEARCH


ASSISTANTS WHO WORKED ON THIS 


CONFERENCE.


FINALLY, THANKS TO ALL OF YOU 


FOR BEING HERE TODAY.


I'M LOOKING FORWARD TO THE 


CONVERSATIONS TO COME.


AND WITH THAT, I'VE WAITED LONG 


IF YOU 


ENOUGH FOR LISA TO ARRIVE AND WE


CAN START THE FIRST PANEL.


I CAN STRETCH OUT.


ONE OF THE GREAT THINGS YOU 


LEARN AS A FACULTY MEMBER IS YOU


CAN SHORTEN OR STRETCH OUT YOUR 


REMARKS FOR ANY LENGTH NEEDED 


FOR THE OCCASION.


SO I'M REALLY DELIGHTED TO 


WELCOME OUR FIRST PANEL THIS 


MORNING.


AND I'M GOING TO TURN THINGS 


OVER TO ERIK TO GET US STARTED.