NOTES
Here is the first part of that short lecture before the Netroots Nation conference in Las Vegas this summer.
ELIZABETH WARREN: I thought of four things that we should think about as we begin to build a new bureau. The first one is: It must stand for families. We've had long enough where there's been no one to stand for families. Now, what does that mean? It means, in part, in the case of the credit agreements that we've been talking about, a level playing field again. It means that there's someone there to make sure that both families and lenders understand the terms of the credit agreement; that it is as obvious to one side as the other; that when they come together, they get what this transaction is, the cost; that we create competitive markets so that the products are products that not only are priced so that consumers can understand them, but they're priced well in the marketplace.
But it also means something else to stand on behalf of families. When folks--when powerful people get together in our government, and they start to divide up where things are going to go, when they start to make decisions about who's going to be helped and who's not going to be helped, there needs to be at least one person in the room who asks the question, how will this affect America's families? Not just how will it affect America's banks, not just how will it affect America's businesses, but how will it affect America's families? One of the things this bureau can do is be there on behalf of American families.
Now, the second thing that I think is really critical about this agency is it must be reality-based. It's not good enough to have a great theory. And frankly, it's not good enough to have just a good heart. It's got to be grounded in how things really work on the ground. And I'm going to give you an example of that. Small banks. If the consequence of this agency is to put in enough new bureaucratic obligations that it crushes community banks, then the agency will not have been successful. If the community banks are driven out of business, that creates more concentration in the banking industry. The big get bigger, and the small go away. But it also means there are fewer of those banks around to lend to the small businesses that we're counting on to restart this economy. And it means that families themselves have fewer choices between small banks and big banks. And that's a choice we've got to preserve. So, ultimately, what this agency has to be about is, yes, the first one on the side of the families, but second, the side of creating workable, realistic markets, sustainable markets, over time--markets that work for consumers, but that also create a viable functioning credit system. It's got to be part of what goes into this.
Third part is the agency--the bureau. The bureau has to be able to grow and change. You know, part of what went wrong in the 1930s was that we didn't keep the rules up to date. The world changed around it. The markets changed around it. How families behaved changed around it. But the rules were not changing. They were not vital. And so, what this agency--what we have to think about when you're building in at the beginning is, how do you build change? How do you build some creative destruction into the agency itself? You know, I come from the world of bankruptcy. It's what I teach. Bankruptcy is littered with the businesses that didn't adapt to the world. Government doesn't have that same discipline in it. And so, part of building this agency is building in how it will change and adapt over time, that it has the right structure to do that.
And then the last part I want to mention is part of why I'm here today. This will be the first agency we have built in a wired world. Think about that for just one minute. The relationship between government agencies, between bureaucracy, between the government and its people, at the time we built all of the earlier agencies, was one of--the government labors relative obscurity, and you send out some information, and people get it through their newspapers or watching television or radio or whatever they listen to. This is an agency that will be the first to be born digital. It will be an agency that can send from--it will have the capacity to communicate with millions of Americans by just hitting a send button. It will also be an agency where millions of Americans have the capacity to communicate with the agency by hitting a send button. And the possibilities here are endless. The notion that part of how one comes to understand and define the problems in the credit area will change if we hear--if this agency hears, if this bureau hears from people who are experiencing it. This is part of its--it can be built into the research function of the agency. If the agency can hear from people and communicate with people, it changes the concept of how regulations work, of how regulations are tested, of how regulations are communicated and how they are enforced. So, I think of this as a real opportunity as we build this agency, not to replicate what was built last time, when we had a consumer agency in the 1970s, but to try a whole new model, to think about this agency from a different perspective.
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