A Fighting Chance

And one other thing: The team did some real-life road testing. That’s how Pat and several other CFPB staffers ended up behind the one-way mirror, watching this man (I’ll call him Mr. Harris, to protect his privacy) who would be one of the first people to take the form for a test drive.

Pat told me Mr. Harris was an African American man in his midfifties, a little older than most of those who had volunteered for that early test drive. He had a soft voice, he was a little stocky, and he worked with his hands for a living. He already owned a home, knew how much he could afford, and was starting to think about refinancing his mortgage.

Mr. Harris was ushered into the testing room, where the interviewer greeted him. After some preliminaries, the interviewer got down to business. If this had been the real thing, Mr. Harris would have been staring at a stack of papers and loan officers saying, “Just sign here … and here … and here…”

Instead, the interviewer pushed a single page across the table and asked him to read it. According to the form, the monthly payment on the loan being offered started out at about $850, but it could eventually go up to over $1,800 a month.

Mr. Harris looked down at the paper. He paused. Wait a minute, he said—something’s wrong. My payments could go up that much if interest rates rise? Is that right?

The interviewer said yes. This was an adjustable rate mortgage. If interest rates stayed low, his payments would be low. But if interest rates rose, that was how much he could have to pay.

Mr. Harris thought about it for a minute, then shoved the paper back across the table. “No. I don’t want it. I can’t afford that loan.”

That’s when Pat McCoy felt like bursting into song. Hallelujah! The form had done exactly what it was supposed to do. It gave Mr. Harris clear information, so he could make a choice. Plain and simple.

Okay, it wasn’t exactly the Red Sox winning the World Series, and there was still a whole lot of work to do before this form and others would be final and lenders would be required to use them. And we knew that getting through the whole regulatory process with just one page would be tough. But we thought it was pretty exciting. We’d been under way for only a few months, and already the agency was taking concrete steps toward changes that would make a real difference for millions of families.

Who’s the Bad Guy?



By now, the consumer agency was gaining some momentum. We had launched our website, the plan for the complaint hotline was taking shape, and Holly Petraeus was ramping up her visits to military bases. Our work to develop a shorter mortgage form was getting some traction. We were on the move—literally. We had set up shop in our new, temporary headquarters in an office building several blocks away from the Treasury Building.

Finally, we were beginning to get our feet under us. I stopped waking up at three in the morning with my heart pounding. I almost started to believe I could relax a little.

Almost, but we still had a long way to go. And if I’d been a little more savvy in the ways of Washington, I probably could have sensed that trouble was coming.

In March, the first bomb landed. It was an all-out attack on the agency and on me personally. It began with a headline-grabbing accusation that we—and I—had stepped way out of line. What did we do wrong? The short story is that we stood accused of helping the US government defend consumers. Yup, that’s pretty much what it added up to.

The longer story, of course, was more complicated. Back in October 2010, the press broke the news that several giant banks had violated the law while foreclosing against homeowners. It wasn’t just a technical error here or there. The banks had flat-out lied, over and over and over. Foreclosure is a complicated process for a very good reason: The law requires safeguards to make sure that a family isn’t thrown out of their home by mistake. But it took time and resources for the banks to comply, so several of the big banks had apparently decided just to ignore many of those laws. “Robo-signing” was rampant; one loan officer famously testified that he signed off on ten thousand foreclosure documents every month. Documents had been falsified, and tens of thousands of families had been trapped in a nightmare of lost paperwork and endless delays that had turned their lives upside down and landed many out on the street. The stories were genuinely awful.