PORTLAND, Maine – Roughly 40 Maine businesspeople met Wednesday with a high-level federal regulator to discuss how a new agency with broad authority to regulate the nation’s financial system might affect Maine businesses.
The conference, held at the Embassy Suites Hotel, was initiated by Sen. Olympia Snowe and attended by Elizabeth Warren, a Harvard Law School professor who is in charge of creating the federal agency. Warren came to Portland at Snowe’s request to hear from businesspeople.
The Consumer Financial Protection Bureau has authority to implement and enforce consumer finance laws, review financial institutions’ business practices, and promote openness and clarity for consumers in financial matters. According to the White House, the agency also will help stabilize the financial system and prevent future meltdowns.
Several businesspeople who attended Wednesday said they were concerned about the potential impacts of a new layer of federal regulation on small businesses, particularly in the housing, mortgage and banking industries.
“I have a lot of concerns. She is setting up a new agency,” Karen Brown-Mohr, executive director of the Manufactured Housing Association of Maine, said after meeting with Snowe and Warren. “Their agency will regulate us, and if they don’t understand the uniqueness of our product, they can put us out of business.”
Staffers from banks, mortgage companies and home builders attended the conference, which included two roughly one-hour closed-door meetings. Also attending were representatives of local corporations such as L.L Bean and Wright Express, and executives from trade groups such as the Maine Association of Realtors and the Maine Merchants Association, said Snowe press secretary Katie Bruns.
Dick Morin, a representative of the Maine Association of Mortgage Brokers, said he attended to tell Warren to use caution when writing federal rules.
“The flurry of regulation over the last couple of years has done a lot to snuff out small business,” Morin said just before heading into the second meeting of the day.
Morin, who is also head of Kennebunk-based Consumers First Mortgage, said small companies such as his already lack the resources to understand and comply with a myriad of regulations.
“We need a little more care and caution. Let’s make sure we assess the consequences,” he said.
Although the new federal agency was created last year, it will not be up and running until July. Warren’s job is to oversee its development.
At a news conference between sessions, Snowe said Wednesday’s meetings will help Warren learn how new regulations might hurt small companies.
“We are establishing an open line of communication with those who we depend on to turn around this economy,” she said.
A Snowe media release said Warren’s visit is not part of a larger tour. “Today’s visit to Maine marks the first time Professor Warren has traveled to a state at the invitation of an elected official to meet with such a diverse group of interested parties,” the release said.
Warren told reporters “there is a lot to learn down in Washington from bankers in Maine.” She said her goal is to regulate the financial system without hurting small businesses.
“The way we do this has to be in a way that works for community banks, credit unions and other (businesses). We can put together rules and regulations, but if, at the end of the day, we … drive out community banks, we would have failed as an agency,” she said.
Brown-Mohr, of the Manufactured Housing Association, said she told Warren that new rules could force her members out of business.
In the past, she said, manufactured housing companies told prospective buyers about financing options and recommended mortgage brokers. She fears the new agency may require her members to become licensed mortgage loan originators before they can give advice.
Such a requirement, she said, could further hurt an industry that’s already struggling. Two large manufactured housing companies, Oxford Homes and Burlington Homes, already have failed, she said.
Although Morin, the mortgage broker, fears regulations could hurt his small business, he said rules created with industry input could be beneficial.
“The (new agency) may bring more regulations under one roof, which might be positive. The last couple of years were reactive. This may be a turn for the good,” he said.
The financial protection bureau was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law by President Obama on July 21, 2010.
In September, Obama announced that Warren, a longtime advocate of such an agency, would lead its creation. She also will help pick its first permanent director.
Snowe voted for the Dodd-Frank bill. She introduced an amendment to the legislation calling for review panels to consider the impact on small businesses, and the amendment was part of the final bill.
Distributed by McClatchy-Tribune Information Services.