It’s unofficially official. President Obama has tapped Harvard law professor Elizabeth Warren to set up the Consumer Financial Protection Bureau, the brand new agency authorized by the financial reform law that Congress passed this summer. According to her posting on the White House’s blog, Warren accepted the position of Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau. While it’s not the confirmation-required director appointment that some would have liked, the 19-word title means that finally, consumers will have a true advocate to help shield them against the worst financial services practices. But with so many questionable practices to guard from, where should Warren and the CFPB begin?
Public Citizen’s David Arkush, one of a panel of consumer experts recommending CFPB priority issues in a Reuters news piece, said ending forced arbitration should be one of the agency’s first priorities, right up there with eliminating predatory debt collection practices and cleaning up the mortgage markets. Under the Dodd-Frank Wall Street Reform Act, the CFPB may restrict or eliminate forced arbitration clauses from consumer financial products and services after conducting a study on the practice. As far as we’re concerned, the harm caused by forced arbitration is well-documented, and an immediate outright ban on forced arbitration would be entirely appropriate. Nevertheless, Warren leading the effort to set up the CFPB and the vast potential for the new agency’s future actions, only means that circumstances have improved significantly for consumers.