The Janitor's Daughter

As someone who once lost a job and struggled with the weight of credit card debt and the shame of being unable to pay one's bills; as someone who has since watched the never-ending cycle of debt strangle and impoverish others; and, as someone who has come to realize the role that creditors and their contracts play, I have followed with great interest how this would be addressed by the administration, if at all.

I first saw Harvard law professor Elizabeth Warren on Bill Moyers Journal. She educated me on the current economic crisis and how it has affected the other 98 percent of us. I posted about her as one of my most trusted people in 2009.

With the announcement yesterday by President Obama of Professor Warren to launch the new Consumer Financial Protection Bureau, he has made a definitive step toward keeping his campaign promise to move away from special interests and lobbyists in an effort to protect middle-class families. As I understand it, Warren will not answer to Congress and will not be the first official director; however, she will have direct input into policies and programs to protect the financial interests of the middle-class.

In Summer 2007, Warren wrote the following in Democracy: A Journal of Ideas. It is well worth the read.

Unsafe at Any Rate
If it's good enough for microwaves, it's good enough for mortgages. Why we need a Financial Product Safety Commission.
by Elizabeth Warren

It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street–and the mortgage won’t even carry a disclosure of that fact to the homeowner. Similarly, it’s impossible to change the price on a toaster once it has been purchased. But long after the papers have been signed, it is possible to triple the price of the credit used to finance the purchase of that appliance, even if the customer meets all the credit terms, in full and on time. Why are consumers safe when they purchase tangible consumer products with cash, but when they sign up for routine financial products like mortgages and credit cards they are left at the mercy of their creditors?


The difference between the two markets is regulation. Although considered an epithet in Washington since Ronald Reagan swept into the White House, the "R-word" supports a booming market in tangible consumer goods. Nearly every product sold in America has passed basic safety regulations well in advance of reaching store shelves. Credit products, by comparison, are regulated by a tattered patchwork of federal and state laws that have failed to adapt to changing markets. Moreover, thanks to effective regulation, innovation in the market for physical products has led to more safety and cutting-edge features. By comparison, innovation in financial products has produced incomprehensible terms and sharp practices that have left families at the mercy of those who write the contracts. Continue reading....