The new consumer financial protection agency will help small banks compete against larger banks and other lenders, Obama administration consumer czar Elizabeth Warren said Tuesday
Small banks have expressed concern the new agency, set to open its doors in July, will add regulatory costs, making it harder for them to survive.
Warren told a gathering of community bankers that the opposite will happen as the agency simplifies regulations on products such as mortgages and seeks to crack down on non-bank lenders that went largely unregulated during the 2007-2009 financial crisis and are accused of shady lending practices.
"I know that you want a regulatory structure that doesn't require an army of lawyers," she said in remarks prepared for delivery at the Independent Community Bankers of America annual convention. "Big banks may be able to afford to hire all those lawyers, but you cannot."
The Consumer Financial Protection Bureau is under attack from Republicans in Congress who have argued it will have too much power and will prove a burden for smaller institutions.
Warren has been out trying to sell the public and the financial industry on the new bureau's benefits.
Her pitch to community bankers on Tuesday is that making financial products easier for consumers to understand complements their business model.
"It is hard to compete when you are telling the truth up front and your competitors aren't," she said. "When everyone has to make the price clear up front, then customers can see good value."
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