Treasury Secretary Timothy Geithner and special advisor Elizabeth Warren said they intend to make mortgage language simpler so consumers can make better choices as they opened a forum on the topic on Tuesday.
Disclosure isn't going to solve all problems, Geithner said in opening remarks to a group of mortgage industry and consumer advocates. But it is one of the most powerful tools we have for giving people better information so they can make better choices about how they borrow, how they use credit.
With Warren at his side, Geithner made clear that the fledgling Consumer Protection Financial Bureau will have as its first priority clearing up the mortgage process.
I approach this with great optimism because my sense is that there are many people at this table that want to get to a better place on this, Warren said in brief remarks before the meeting went into a closed session.
Warren was tapped by the White House last Friday to act as a special adviser to oversee creation of the new bureau, which is being established as part of the financial reform overhaul passed earlier in the summer.
The bureau, which is Warren's brainchild, will have broad powers to write and enforce rules covering mortgages, credit cards and other consumer financial products.
She has until July 2011 to get the agency up and running. Eventually, it will move over to the Federal Reserve.
Moving quickly to improve mortgage disclosure is one in a series of concrete steps we're taking to implement the historic consumer protections included in the Dodd-Frank financial reform law, Geithner said.
The legislation includes a requirement that mortgage lenders verify borrowers' income, unlike in the past when some made so-called liar's loans that frequently failed, and prohibits incentives to encourage lenders to steer borrowers into higher-cost loans.
Warren was a frequent Wall Street critic and naming her an assistant to the president and special advisor to the U.S. Treasury secretary avoids a potentially difficult confirmation battle on Capitol Hill.
The White House said last week that President Obama hopes to name the agency's chief in the next several months but declined to say whether Warren would be a candidate.