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.