A Fighting Chance

As if that weren’t bad enough, there was one more problem: The mishmash of agencies left giant holes in the regulatory fabric. In fact, a growing number of lenders were left out altogether. No federal agency was responsible for overseeing payday lenders, title lenders, or an increasing number of mortgage lenders. Those guys could do pretty much whatever they wanted. Worse, many of them were financed by the big banks.

So credit regulation was a tangled mess, and enforcement of the rules was spotty at best. We needed an agency—one agency—that would be responsible for writing new rules, for updating the rules as lenders changed their practices, and for enforcing the rules. With a new agency, every mortgage and credit card would be regulated the same—no more shopping around for lax regulators or figuring out how to avoid oversight altogether. The system would be a lot more efficient and a whole lot more effective.

I didn’t say so at the time, but I also thought that this agency could help us navigate a practical political problem. If the groups in this room lined up behind a hundred different ideas about how to provide financial protection for consumers, we’d get negotiated down to a dozen or so. And then those dozen would be like fence posts on the prairie—the giant banks could see them from a mile off and run right around them. But if we all rallied around a truly comprehensive idea—a long-term structural solution that would keep momentum behind reform over time—that might give us a fighting chance to create an effective counterweight to the big banks.

For many of the people in the room that day, the idea for the Consumer Financial Protection Bureau (as the agency would eventually be known) was new, and it would require a huge leap of faith. How could all these organizations, each with its own agenda and history, get behind a relatively unknown and untested idea, one that at the time had very little active political support?

People would find plenty of other reasons to be skeptical about the consumer agency. The banks would almost certainly hate it, and they would instruct their lobbyists to fight to the death to stop it. Even though the agency would streamline government and make it more efficient, the very idea of a new government agency would probably enrage the small-government advocates on the political right. Many in the media would try to rip the idea apart, and Fox News would have a field day.

And even if we won, what if the agency got a lousy director who failed to take on tough problems or was bad at spotting emerging threats? After all, other government agencies had been started with high hopes, only to sink in a bureaucratic tangle. We might fight an epic battle, somehow manage to get the agency launched, and then see it amount to little.

Still, I believed in this dream; American families desperately needed a consumer agency like this one. I knew that if the groups represented by the people in this room didn’t get behind the proposal, there was zero chance of getting it through Congress. I also knew that if our first conversation focused on all that was wrong or risky or unfamiliar, the idea would die that very morning. So this was the moment.

I finished my presentation and glanced nervously around the room. No one spoke.

I looked at Damon. He looked calm, unusually calm for Damon. Then he said: “Comments?”

I could feel my heart pounding. This was like the day I stood on the corner holding hands with five-year-old Amelia, waiting for the school bus on her first day of kindergarten. My prayer that day was intense and addressed to all forces in the universe: Please please please be kind and give her a chance. Now I felt the same way, because when they are still young, ideas—like children—can be knocked over so easily.

A hand shot up. Damon called on a man at the far end of the long table. Heads turned. I didn’t know who he was. I didn’t breathe.

“Great idea!” the man said.

I don’t remember anything else he said, just the feeling that I could breathe out—at least a little.

Damon called on someone else and got a similar response. And then a third person offered support.

Damon smiled.

After that came plenty of questions and some real concerns about whether the agency would be strong enough to succeed or if the banks would whittle it down to nothing. People were nervous, but the first guy had saved it. He gave the idea some credibility, some enthusiasm, some wind in its sails.

We were still ridiculously outgunned by the lobbyists and giant banks. But a small army began forming that day as a handful of good guys endorsed the idea and decided to fight for it. I didn’t know it then, but they would become the most important soldiers in the battle that was to come.





Consumer Safety