Yesterday, Elizabeth Warren, acting head of the Consumer Financial Protection Bureau implementation team, announced the hire of several new senior staff, most of them from the financial industry. Four out of the five new hires also happen to be Harvard or Yale graduates, which is not surprising given that Warren is a Harvard professor on leave for this academic year to set up the CFPB.
The highest-ranking new hire, Raj Date, associate director for research, markets and regulations, spent 10 years in the banking industry, as senior vice president at Capital One Financial and a managing director at Deutsche Bank. He will oversee research, regulations, card markets, mortgage and home equity markets, credit information markets, deposit and payment markets, and installment lending markets. As chairman and executive director of the think tank Cambridge Winter Center, Date testified before Congress last March about the small business credit crunch. He recommended reducing the regulatory risk weighting on some small business loans.
"For those banks that find regulatory capital their binding constraint, but who do see economically attractive lending opportunities in the marketplace, a temporary reduction in regulatory capital requirements related to that lending would spur counter-cyclical credit extension," he said. "In essence, we would enable otherwise economically attractive loans that are today held back by the legacy of poorly performing, capital-intensive assets on bank balance sheets. By limiting the percentage increase in small business loans eligible for this risk weight-reduction, we could prevent small banks from abusing this program by taking on outsized small business portfolios." Based on this evidence, it seems banks will have someone with some understanding and sympathy for their business problems in this high-level CFPB official.
Corey Stone, who will lead the Credit Information Markets team (as assistant director of credit Information markets), is a community banker and a consumer advocate. He has been until recently chairman of the board of Start Community Bank in New Haven, Connecticut; he is also the former CEO of Pay Rent, Build Credit, Inc., a sort of alternative credit bureau that let consumers demonstrate creditworthiness using their recurring rental and bill payments rather than through a credit record. Stone is also a member of the Federal Reserve Board's Consumer Advisory Council.
Elizabeth Vale, who as assistant director for community banks and credit unions will be the CFPB's liaison to community banks, credit unions, and small businesses, is a former managing director at Morgan Stanley and a vice president and portfolio manager at Philadelphia National Bank. Most recently, Vale was executive director of the White House Business Council.
Two other appointments bring a former attorney and a Freddie Mac official onto the CFPB team. Patricia McCoy, who will head the mortgage and home equity markets team, was formerly director of the Insurance Law Center and the Connecticut Mutual Professor of Law at the University of Connecticut School of Law. Before entering academia, McCoy was a partner at the law firm of Mayer, Brown in Washington, D.C., specializing in financial services law and commercial litigation. Zixta Martinez, who as assistant director for community affairs will lead the team's outreach to consumer advocacy groups and community organizations, was formerly senior director of industry and state relations at Freddie Mac and director at the National Fair Housing Alliance.