Elizabeth Warren, the kinda-sorta head of the new Consumer Financial Protection Bureau, said on CNN today that she’s been meeting with banking-industry types, and that the talks have been going rather smoothly.
This is perhaps a little surprising, given that Warren has advocated breaking up too-big-to-fail banks, subjecting them to more scrutiny, raising their taxes, making them take out insurance and proposing that they make transactions with consumers more transparent.
Nevertheless, banks have apparently been receptive to Warren’s suggestion that their contracts with consumers not be enormous, indecipherable tomes of legalese buried in their own fine print. She said that many banks realize that the current situation is “unsustainable.” Warren is pushing for a standard two-page credit card agreement between banks and consumers.
The ultimate goal is to prevent banks from teasing consumers with low initial rates and then springing usurious fees and rate increases on them over time.
“If we can get these products simpler so that the price is clear up front, then the prices are actually having to compete head to head, and the card issuers that are charging the most are going to find themselves with fewer customers,” she said. “That’s how markets work.”
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