The federal official tasked with setting up the new Bureau of Consumer Financial Protection visited Maine on Wednesday, meeting for hours with the state’s banking and business leaders to hear their concerns about any new regulations.
Elizabeth Warren, assistant to the president and special adviser to the secretary of the treasury, came to Maine at the invitation of Sen. Olympia J. Snowe, R-Maine, the ranking Republican on the Senate’s Small Business and Entrepreneurship Committee.
In an interview between meetings in Portland on Wednesday, Snowe said she had written to Warren this fall, expressing concerns over how new regulations would affect small businesses and community banks. Warren offered to visit Maine, said Snowe, and her trip here represents the first give-and-take with small, “main street” businesses, Snowe said.
“Small businesses and other institutions that are covered under this agency could bear the brunt, if they don’t take into account costly, onerous regulations,” said Snowe. “I wanted to bring the groups together for professor Warren, to make sure she has first-hand information from the institutions, merchants, retailers, credit un-ions, community banks and an array of stakeholders.”
The bureau will be an independent part within the Federal Reserve System “that will help empower consumers with the information they need to make financial decisions that are best for them and their families,” according to the Treasury Web site. It was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
“The CFPB will work to promote fairness and transparency for mortgages, credit cards and other consumer financial products and services. The CFPB will set and enforce clear, consistent rules that allow banks and other consumer financial services providers to compete on a level playing field and that let consumers see clearly the costs and features of products and services,” the site said.
Christopher Pinkham, president of the Maine Bankers Association, said the business leaders in his organization had several messages they wanted to give to Warren. One point, he said, was that the community banks in Maine weren’t the ones involved in the questionable practices that brought on the financial crisis.
“We were the players that made reasonable loans with the expectation that people had the capacity to pay them back. We didn’t participate in sub-prime, we didn’t do the [no-document] stated income sort of lending,” said Pinkham. “We have such a high level of compliance responsibilities now — we’re consistent, we do a good job now.”
The group also asked how the bureau would enforce new federal regulations to businesses like payday lenders, cash advance organizations and other entities that aren’t currently regulated.
Warren said several times that the bureau should not hurt the businesses she was meeting with in Maine, said Pinkham.
Snowe said Warren talked about using the bureau to simplify regulation, to get rid of duplicate requirements between federal agencies with regards to mortgages and money lending.
“The fact is I think we’ve got to attack regulation,” said Snowe. “The cost of compliance and regulation right now is hideous.”
Snowe said Warren supported an amendment of hers to the Dodd-Frank Act that set up small-business review panels. Small businesses on those panels will provide input on any regulations before they can be promulgated, she said, to minimize any impact on such firms nationwide.
Warren and Snowe met with representatives of two dozen Maine banks, credit unions, mortgage bankers, brokers and real estate agents, home builders, manufactured housing, merchants and retailers including Hannaford, L.L. Bean and others.
“They’re in the forefront of this regulatory process, which is good,” said Snowe.