The new “Consumer Czar” and you…is the government going to save you from people trying to rip you off?

A lot has been happening in the consumer law world. The big news is that (sadly) Professor Elizabeth Warren WILL NOT serve as the new "Consumer Czar". I had great hopes that Professor Warren would enjoy the appointment. Professor Warren has had a big impact on the bankruptcy world given her work in the years leading up to the Bankruptcy Reform Act of 2005.

Elizabeth Warren is the well-known and well-regarded Harvard Law School professor who is perhaps the de facto national spokesperson on issues concerning consumer debt and consumer bankruptcy. She is perhaps most well known for her involvement in a study from the early 2000s which indicated that some 40% of consumer bankruptcy filings had as their root cause, or at least their “tipping point” cause, those hardships occasioned by uninsured or underinsured medical expenses. She was also an outspoken advocate for the consumer in speaking out in opposition to the passage of the bankruptcy law reforms of 2005. Many credit her testimony and writings with having the effect of shaving off some of the more abrasive and ridiculously punitive provisions of the 2005 reform law.

Most knowledgeable consumer bankruptcy lawyers were probably cheering for Professor Warren’s appointment to the position of Consumer Czar, as Professor Warren is somewhat of a “hero” to consumer bankruptcy lawyers, at least to those lawyers who care enough to join and financially support the National Association of Consumer Bankruptcy Attorneys (NACBA). Professor Warren has been a proud NACBA supporter and contributor for many years. Ms. Warren has helped provide NACBA with a voice before Congress. To my surprise, many local lawyers calling themselves “bankruptcy lawyers” refuse to join either NACBA or ABI (the American Bankruptcy Institute) just to try to cheaply save a buck or two every year. Membership to at least one of these organizations is essential to stay “plugged in” to what is going on in the legal field of bankruptcy/consumer rights as the organizations provide education and alerts as to cutting edge developments and strategies in the areas of consumer rights and bankruptcy law.

To the surprise of many, President Obama passed over Professor Elizabeth Warren and nominated Richard Cordray (Interestingly, I blogged about Mr. Cordray some time ago in early 2011 as a “person to watch”, when his foreclosure crisis campaigns came to my attention by way of a New York Times news article.) to head the new Consumer Financial Protection Bureau. Republicans had vowed to deny confirmation of Professor Warren or any other nominee until and unless the organization was revised to have real decisions made by a committee of five and be subject to the appropriations process. Most observers feel these changes would effectively eliminate the new agency’s ability to restrain financial institutions from improvident lending decisions and harsh anti-consumer business practices. Cordray is the former Attorney General of Ohio and came to national attention by his aggressive investigations of foreclosure practices. There is speculation that President Obama may get around the republican intransigence by making a recess appointment. Some republicans are exploring the feasibility of keeping the Senate technically in session to prevent this. Warren will leave her post as adviser and return to Harvard but may challenge republican Scott Brown for the Massachusetts Senate seat he won following the death of Ted Kennedy.

So getting back to the question at hand, I will give you the James H. MaGee Analysis of decision to appoint Cordray instead of Warren: I think Professor Warren would have done a fine job of reigning in some of the more ridiculously abusive consumer lending in our economy. To date, I have little opinion of what Mr. Cordray might do with respect to consumer law concerns and consumer issues. I anticipate that he will make not nearly the splash and impact that we would have enjoyed under Professor Warren. I think that his appointment signals that the President intends for the Consumer Czar position to be a rather quiet cabinet position with not much activity. So, with Richard Cordray, as the consumer you probably lose out more than you gain, as compared to what Professor Warren would have done with the position.

In plain, it may be the time to think about your options of decreasing your current debt, as progress of governmental programs that help relieve and minimize consumer debt may begin to slow.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at or e-mail directly at [email protected] To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

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