ABA Banking Journal - December 2011 - (Page 28)
feature story | washington profile: raj date, CfpB consumer regulator Presidential advisor Raj Date discusses the challenge of creating a brand-new regulatory agency with a very different mission Building the new N By Steve Cocheo, executive editor early three years ago, when the Consumer Financial Protection Bureau was still just a twinkle in Elizabeth Warren’s eye, a defender of the concept made what some might have considered an unexpected point in a paper called “The Scalability of Bad Ideas.” The writer, having argued that a key duty of the bureau should be to help consumers figure out what aspects of products to “dig deeply” on, and which to pay less heed to, argued: “The new agency should not simply repeat the mistake of assuming that mountains of disclosure documents can be rendered effective simply by making those mountains higher. This mission is notably distinct from the notion of designing or mandating ‘plain-vanilla’ products—a notion that is problematic both in concept and in practice.” Most bankers would vigorously support both parts of this statement—ABA, in fact, attacked the “plain vanilla” concept early on. And while the author, then chairman and executive director of the Cambridge Winter Center for Financial Institutions Policy, a fledgling think tank, had worked for both Wall Street and commercial banking institutions, what’s of more interest is where he works now. The author was Raj Date (pronounced “Dahtay”), who is an assistant to the President and special advisor to the Treasury Secretary, assigned to work for CFPB. More importantly, he is the man running it while the nominated director, Richard Cordray, awaits Senate confirmation that remains on indefinite political hold. Interestingly, sources who follow the agency indicate that it was Date’s work at Cambridge Winter, which he founded, that attracted the attention of Warren, who is campaigning for U.S. Senate. Date is considered more businesslike and easier to communicate with than Warren. As he moved into a government post, he did not change his mind on the point he made in his January 2010 “Scalability” paper. In a recent speech, for example, he compared federal consumer financial protection to a sailboat badly in need of having its accumulated barnacles scraped. Also: “It is too often too easy 28 | ABA BANKING JOURNAL | december 2011 photo by elia seba, american Bankers association
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