The Chicago Tribune
By: Mary Ellen Podmolik
August 11, 2010
Potential director says new bureau not waiting for chief's appointment
The Consumer Financial Protection Bureau has no director, but infrastructure for the agency that will regulate mortgages, credit cards and other consumer products already is being developed, said one of the Washington insiders under consideration to head the bureau.
"Treasury isn't sitting and waiting for the confirmation process," Michael Barr, assistant U.S. Treasury secretary, said during a wide-ranging conversation Tuesday with the Tribune's editorial board.
Barr, a candidate for the director's job, identified three early initiatives of the bureau, namely to reconcile the different statements used in the home purchase closing process, to supervise the registration of non-bank mortgage lenders and, for the first time, to supervise the activities of consumer credit bureaus.
"It will take time," he said of the initiatives. "These are things that are going to have to get staged."
Still, Barr said, there is less uncertainty about the economy now that the financial reform bill was passed and signed into law last month. Barr was in Chicago to address the Chicago Club as part of the Obama administration's roadshow for its financial reform initiative. "The kind of uncertainty people are talking about now is small (compared) to the uncertainty we had in the buildup to the financial crisis," he said. "We are more certain today than we were three weeks ago."
Harvard law professor Elizabeth Warren, chairwoman of a watchdog panel supervising the Troubled Asset Relief Program, also is a candidate for the job.
Barr said the administration plans to have an outline to Congress by January for the overhaul of Fannie Mae and Freddie Mac.
"We're not going to have a system where you can have privatized gains and socialized losses," Barr said. "The idea of an implicit guarantee is a thing of the past."
That, he said, is likely to put further downward pressure on homeownership rates, which last year declined for the fifth consecutive year, according to the Census Bureau.
Barr defended the Treasury Department's proposal to do away with paper checks and distribute federal Social Security and Supplemental Security Income benefits electronically, saying it's a cost-saving move.
In comments filed with the Treasury, Consumers Union said consumers should be able to pick the option that fits their needs.
"If the government is going to require benefit recipients to use prepaid debit cards or direct deposit into their bank account, it should do more to limit the fees charged for using them and make them easier to use," the nonprofit group that publishes Consumer Reports wrote in its testimony.