Mark W. Olson speaks on Consumer Financial Protection Bureau in recent Federal Times article. Read full article below.
Geithner Takes First Step In New Consumer Agency's Creation
By STEPHEN LOSEY | Last Updated: August 10, 2010
The clock is ticking on the new Consumer Financial Protection Bureau. The government has one year to set up the agency and transfer consumer protection duties to it that are now done by seven other agencies.
By next July, the new bureau will be overseeing products and services such as mortgages, credit cards and student loans; writing rules governing banks and other financial institutions; and enforcing regulations on banks and credit unions with more than $10 billion in assets.
Treasury Secretary Timothy Geithner took the first concrete step toward creating the bureau July 30 when he notified employees at the Office of the Comptroller of the Currency, Federal Reserve, Office of Thrift Supervision, Federal Deposit Insurance Corp., National Credit Union Administration, Housing and Urban Development Department and Federal Trade Commission that they could be transferred to the new bureau.
Geithner said he will consult with the agencies before deciding who will be transferred. But the memo did not say when the transfers would be made, how long they might last or how many people the bureau may need.
"We want to let you know that we are committed to a fair transition, and the CFPB will rely on the skills, talents and experience of many of you during this period," Geithner wrote.
National Treasury Employees Union President Colleen Kelley said the agencies and lawmakers are talking to the union as they plan these transitions. She said NTEU will be part of implementation teams now being formed.
"If they need numbers and skills, NTEU will work with them to ensure the smoothest transition and, if at all possible, to make sure there's no harm done to [transferred employees'] careers," Kelley said.
Kelley also wants to make sure agencies' missions don't suffer when their employees are transferred. She said it's not clear how many transfers will be permanent and how many will be temporary, and how long temporary transfers will last.
Geithner said in his memo that he's looking for employees with consumer protection backgrounds. But the law creating the bureau said it also will need attorneys, compliance examiners and analysts, economists and statisticians, among others.
One of the first and most important tasks for the bureau will be to write new regulations for the financial industry to follow, said Mark Olson, a former Federal Reserve Board governor and co-chairman of the consulting firm Corporate Risk Advisors.
"This is no time for amateur hour," Olson said. Geithner is "looking for people with experience both in regulatory functions, and presumably people who have had experience in writing regulations."
Olson also said the agency may need to initially use contractors to write those new regulations, which would allow the agency to easily draw down that capability once the initial demand is over.
Olson said the bureau also may have a hard time recruiting from outside the government, because the economic collapse has created a great demand for people who can determine the health of banks and other financial institutions.
Olson expects the new agency will end up with several hundred employees. But some of the staffing details — such as what pay plan its employees will end up under — are still unknown.
And Olson said the new bureau will need to decide fairly soon what type of computer systems it will use: It could set up its own new system or adopt one from a legacy agency. But that decision shouldn't be postponed, Olson said.
"What you have are people from different regulatory agencies, having dealt with different legacy IT systems," Olson said. "You wouldn't think that would be a complex decision, but it is."
Treasury, which is in charge of standing the bureau until the Senate approves its first director, said it is too soon to discuss details. President Obama on July 21 signed the Wall Street reform bill that created the bureau.