Can customers easily understand the product? Regulators should be focused on that question. Three generations ago, President Franklin Roosevelt appointed Joseph P. Kennedy to the new Securities and Exchange Commission. The president's selection of a businessman outraged many at the time. One commentator described it as "setting a wolf to guard a flock of sheep."
Shortly after he was appointed, Kennedy observed: "Everybody says that what business needs is confidence. I agree. Confidence that if business does the right thing it will be protected and given a chance to live, make profits and grow, helping itself and helping the country. . . . We are not working on the theory that all the men and all the women connected with finance, either as workers or investors, are to be regarded as guilty of some undefined crime. On the contrary, we hold that business based on good will should be encouraged." Based on that premise, Kennedy used regulation to strengthen America's financial markets and help protect investors.
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Two weeks ago, President Obama appointed me to serve as his assistant, and Treasury Secretary Timothy Geithner asked me to serve as his special adviser responsible for getting the new Consumer Financial Protection Bureau off the ground. Shortly after the president walked me into the Rose Garden to announce my appointment, I started calling the CEOs of financial institutions. My first day on the job, I met with community bankers from Oklahoma. The following day I met with credit union leaders. On Wednesday night, I walked into an audience of several hundred industry leaders at a Financial Services Roundtable event to ask them to help us repair a broken consumer credit market.
The very early feedback I've received indicates that the industry is eager for simplification. Some bankers have told me that a short, easy-to-read agreement is exactly what they want. And many others have expressed their interest in working with the new agency to advance a robust market for consumer credit—one that produces real competition that benefits millions of Americans.
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