Despite taking a consumer approach to regulation, Elizabeth Warren, special assistant to President Obama and likely director of the Consumer Financial Protection Bureau, said oversight will not block the ability of financial institutions to do business. That is, of course, as long as the financial institution is in full compliance with the law. Speaking to journalists at the 2011 Society of American Business Editors and Writers conference in Dallas, Warren said mortgages written years ago were not as “out of control” as those in the years leading up to the bust in housing. “Back then a customer could ask two questions: Can I afford this thing and can I get it somewhere else, at a better deal?” she said. “Consumers should be able to figure out costs and risks effectively.” The path forward is wrought with frustration as the agency prepares to open its doors July 21, according to Warren. For one, the CFPB cannot interfere with other regulators, but other regulators may overrule the CFPB, she said. Potential increased layers of regulation from the CFPB have many financial institutions worried. At a House Financial Services Subcommittee Wednesday, Lynette Smith, president and chief executive of Washington Gas Light Federal Credit Union in Springfield, Va., said the new federal agency needs to focus on “regulating the unregulated in the financial services arena, and not adding new regulatory burdens to those entities that already fall under a functional regulator.” Speaking on behalf of National Association of Federal Credit Unions, Smith expressed concern about the broad authority granted to the CFPB to ridealong on examinations with current regulators before the designated transfer date. Warren added a simplification of the mortgage underwriting process for the consumer is a key concern. “Mortgage documents scream ‘do not read me,’ ” she said. “Those documents may as well have a slab of concrete on them.” Write to Jacob Gaffney. Follow him on Twitter @JacobGaffney.

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