Seventy-five years ago this month, a Lockheed Orion Explorer airplane crashed in Point Barrow, Alaska. The one passenger, a rugged man originally from Oklahoma Indian Territory, died on impact along with the pilot.
The dead passenger had stalked Washington insiders for decades and those who had been in his sights breathed a sigh of relief. But the rest of the nation mourned Will Rogers.
Now another plain-spoken Oklahoman, this time a 61-year-old grandmother named Elizabeth Warren, is chasing some Washington special-interest folks up hill and down dale simply by standing up for consumers and politely saying out loud what ordinary Americans are thinking.
Before some in the financial industry and their capital cohorts continue their attacks on Warren, they would be well advised to consider some of Will Rogers’ sage advice that has stood the test of time: Lettin’ the cat out of the bag is a whole lot easier than puttin’ it back in.
Earlier this month, an industry lobbyist said Warren couldn’t manage the Consumer Financial Protection Bureau in a fair and balanced way because she wants to protect ordinary Americans from bad financial products. In other words: Anyone who has been involved in consumer protection should be disqualified from heading an agency that was created to provide protection to consumers. Go figure.
Foxes in Henhouse
In recent years, most people appointed to federal financial-industry regulators have either been lobbyists or have come from inside the industry. So it’s not surprising that many Americans are fed up and furious about the revolving door between industry and federal agencies.
If industry is going to fight the appointment of regulators simply because they have a background in consumer advocacy, it is high time for a full public airing of the qualifications and industry ties of appointees over the last decade and the results -- preferably through the Financial Crisis Inquiry Commission. Do industry leaders really want this cat out of the bag?
There is nothing in Warren’s long academic and public-service record that indicates any unwillingness to consider all sides of a question. Industry leaders such as Camden Fine, president of the Independent Community Bankers of America, have said Warren is receptive to hearing industry’s point of view.
Regardless of who is appointed director of the CFPB, there is no chance that the financial industry will be ignored. It spends tens of millions on lobbying annually, donates hundreds of millions to members of Congress and there are dozens of statutory and regulatory provisions preventing the adoption of whimsical or unnecessary regulation governing the industry.
Rogers had some other insights the financial industry should take to heart, including his quip that if you are in a hole, stop digging.
The financial industry may want to consider the results of its strategy of stubborn obstructionism. Industry lobbyists and executives proclaimed U.S. President Barack Obama’s financial-reform bill dead on arrival within days of him announcing it last year. The same people were quoted predicting the consumer-protection agency would never happen under their watch.
It was a serious miscalculation and reflective of the industry’s misjudgment of its power and credibility after it did so much to bring on the great recession. Whatever goodwill the industry had retained following the economic crisis went up in smoke in 2009 as it demonstrated an almost uncanny knack for saying or doing the wrong thing at the wrong time. Instead of killing the financial-reform bill, the result was an even tougher, more comprehensive one than the president had proposed.
Now, for some inexplicable reason, the financial industry is publicly campaigning to prevent Warren from becoming the first director of the Consumer Financial Protection Bureau -- a post for which she is eminently qualified.
The result of the industry’s efforts so far has been to elevate the issue to the national level and re-ignite the suspicions and resentment of millions of Americans.
Rogers said something else that holds a lesson for the financial industry: If you are riding ahead of the herd, take a look back every now and then to make sure it’s still there.
Having spent my career in the financial industry, I still harbor hope that its leaders can become more candid, cooperative and even demonstrate wisdom, instead of turning their voice over to lobbyists and industry shills. The universal vilification of banks and other industry participants is unfair to those companies and executives who have put their customers’ and shareholders’ interests on par with their own in recent years and tried to do the right thing.
But the words and actions of some continue to cast a shadow on the entire industry. Arbitrarily piling more regulations on top of already ineffective ones won’t help consumers and will add an unnecessary burden to a stressed financial system.
Warren, and others like her, has pushed not for more regulation but for more sensible and effective regulation to protect the financial health of middle-class Americans.
Financial-industry leaders should recognize that our country needs change in this regard and that more sensible and simplified regulation will benefit both consumers and the industry alike.
(Tim Duncan is chairman of American Business Leaders for Financial Reform and president of Story Street Partners. The opinions expressed are his own.)
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