Signs a gov't regulator is effective
Consumer Financial Protection Bureau head Elizabeth Warren testifies on Capitol Hill in Washington on March 16 Credit: AP
Regulated industries and their regulators shouldn't be too chummy. When they are, bad things can happen -- for instance, 2008's financial crisis, the worst since the Great Depression. So recent grousing about two key federal officials is a comforting sign they're doing their jobs.
At an American Bankers Association conference last Wednesday, Federal Deposit Insurance Corp. chairwoman Sheila Bair was met with groans and catcalls when she defended new overdraft protection rules and reforms enacted after the 2008 crisis.
That same day, Elizabeth Warren, President Barack Obama's choice to set up a new Consumer Financial Protection Bureau, was hammered by members of the House Financial Services Committee wary of the new watchdog agency's role. They took Warren to task, for instance, for helping state attorneys general formulate new rules for how mortgage-service companies treat defaulting customers.
Warren is a sharp, aggressive advocate whom President Barack Obama may, or may not, appoint to run the bureau. Bankers, and their backers in Congress, don't much like the prospect of her in charge.
Regulators and the companies they oversee need to have productive working relationships. But some tension is healthy for the system and the public, whose interests the regulators are supposed to safeguard.
