As she builds the new Consumer Financial Protection Bureau, the consumer watchdog agency created through the Dodd-Frank financial reform bill, Elizabeth Warren says, technology will play an important role.
In a White House blog yesterday, Warren wrote of her plans to meet in Silicon Valley with technology industry leaders to "solicit advice about building a state-of-the-art, 21st century agency that harnesses some new tools that exist in our hyper-connected and digital world."
She offered three ways technology could help the fledging Bureau:
1. Monitoring technology could help the agency "remain a steady and reliable voice for American families" and "ward off industry capture."
2. Business intelligence software could be used to help it spot trends and respond quickly to problems. If we set it up right from the beginning, the agency can collect and analyze data faster and get on top of problems as they occur, not years later," she wrote. "Think about how much sooner attention could have turned to foreclosure documentation (robo-signers and fake notaries) if, back in 2007 and 2008, the consumer agency had been in place to gather information and to act before the problem became a national scandal."
3. Technology could help the agency share data with others. "Technology can be used to expand publicly available data so that more people can analyze information, spot problems, and craft solutions," Warren wrote. "When these data are made available, while also, of course, protecting consumer privacy, shielding personal information and protecting proprietary business information, a shared opportunity arises between the agency and people outside government to have a hand in shaping the consumer credit world."
Yesterday, she lunched with several Silicon Valley technology executives and delivered a speech at the University of California, Berkeley expounding on this technology theme.
First, she implied that bankers use technology in nefarious ways. "Today, information is king, but information is not evenly accessed by all," she said. "Repeat players can understand a complicated financial product that the rest of us have difficulty parsing in full. Lenders can hire teams of lawyers to work out every detail of a contract, then replicate it millions of times; a consumer doesn't have the same option. And with technology to keep track of every purchase, to watch every payment choice, to observe and record the rhythms of our lives, a sophisticated seller can harvest that information, sometimes in ways that provide value, but sometimes in ways that manipulate customers who will never see what happened to them."
She noted that with the right tools, consumers could assist the agency in its work. "New technology can help us supplement the cop on the beat by building a neighborhood watch," she said. "The agency can empower a well-informed population to help expose, early on, consumer financial tricks. If rules are being broken, we don't need to wait for an expert in Washington to wake up."