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Main  Street  First:  Fixing  Broken  Markets  and  Rebuilding  the  Middle  Class  
Elizabeth  Warren  
The  Mario  Savio  Memorial  Lecture  
Remarks  as  Prepared  for  Delivery  
Thursday,  October  28,  2010  
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Thank  you,  Maria,  for  that  very  kind  introduction,  and  thank  you  to  the  Mario  Savio  Lecture  Fund’s  
Board  of  Directors  and  Advisory  Board  for  inviting  me  to  be  here  tonight.  It  is  an  honor  to  give  this  
lecture,  dedicated  to  the  memory  of  a  man  who  tried  to  tell  truth  to  power  and  symbolized  a  
generation’s  attempt  to  bring  change  to  our  country.  
 
When  I  accepted  the  invitation  to  deliver  the  Savio  Lecture  last  spring,  my  life  was  very  different.  
 
By  day,  I  was  a  law  professor  at  Harvard  teaching  contracts  to  first  year  students.  I  also  served  as  the  
chair  of  the  Congressional  Oversight  Panel  for  the  Troubled  Asset  Relief  Program,  or  TARP.  I  tried  to  ask  
hard  questions  on  behalf  of  American  families,  and  I  put  some  very  tough  questions  to  the  
administrators  of  TARP  both  before  and  after  the  Administration  changed  hands.  
 
By  night,  I  was  a  dogged  volunteer,  speaking  with  anyone  who  would  listen  about  the  tricks  and  traps  
hidden  in  the  fine  print  of  mortgages,  credit  cards,  remittances,  and  other  consumer  credit  contracts.  
Wearing  that  hat,  I  knocked  on  doors  in  Washington,  I  wrote  op-­‐eds,  and  I  pushed  as  hard  as  I  could  for  
Congress  to  create  a  new  consumer  agency  in  the  aftermath  of  the  financial  crisis.    
 
I  was  not  the  only  one  pushing  hard.  There  were  many  “bodies  upon  the  gears,”  as  Mario  might  put  it:    
hundreds  of  concerned  citizens  and  groups  who  worked  around  the  clock  to  help  make  sure  that  
powerful  interests  didn’t  quietly  kill  consumer  protection  and  that  we  got  a  vote  on  a  serious,  tough  
new  agency.  We  wanted  an  up  or  down  vote  so  everyone  could  see  whether  Congress  supported  an  
agency  that  would  be  a  voice  for  families.  
 
We  got  our  vote,  and  that’s  when  things  changed.    
 
A  horde  of  lobbyists  fought  us  every  inch  of  the  way,  but,  over  the  summer,  Congress  passed  the  Dodd-­‐
Frank  Wall  Street  Reform  and  Consumer  Protection  Act,  with  our  tough  little  agency  playing  a  starring  
role.  On  July  21,  the  President  signed  the  bill  into  law  and  announced  to  Americans  that  there  will  now  
be  “a  new  consumer  watchdog  with  just  one  job:    looking  out  for  people  –  not  big  banks,  not  lenders,  
not  investment  houses  –  looking  out  for  people  as  they  interact  with  the  financial  system.”  For  the  first  
time  in  our  history,  there  would  be  an  agency  devoted  solely  to  the  economic  strength  of  American  
families.    
 
Last  month,  President  Obama  asked  that  I  serve  as  an  Assistant  to  the  President  and  Secretary  Geithner  
asked  that  I  help  him  stand  up  the  consumer  bureau  so  we  could  get  to  work  on  giving  consumers  a  
voice  and  getting  rid  of  the  tricks  and  traps  hidden  in  the  fine  print  of  consumer  credit  contracts.  
 
Changes  come  from  many  directions.  Those  of  you  who  know  me  may  have  heard  that  I  have  two  
delightful  little  granddaughters  who  are  the  light  of  my  life.  Just  hours  ago,  baby  number  three  arrived,  a  

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little  boy.  When  I  leave  here  tomorrow  morning,  I  will  fly  to  Los  Angeles  and  will  see  him  for  the  first  
time.  While  I’m  in  Los  Angeles,  I  will  also  make  good  on  my  ironclad  contract  with  no  fine  print  that  I  will  
take  the  little  girls  trick-­‐or-­‐treating.    
 
Like  my  grandson,  the  Consumer  Financial  Protection  Bureau  –  or  CFPB  –  is  just  entering  its  infancy.  I  
feel  good  to  know  that  he  will  grow  up  in  a  country  where  the  CFPB    is  devoted  to  being  his  voice  in  
Washington.  I  am  also  glad  to  help  set    this  new  agency  on  the  path  to  strengthen  the  economic  health  
of  American  families.  
 
When  I  talk  about  the  new  agency,  I  mostly  talk  about  the  very  specific  changes  it  can  make  for  families.  
I  talk  about  a  broken  credit  card  market  in  which  fine  print  rains  down  on  families,  making  it  nearly  
impossible  for  anyone  without  a  law  degree,  an  accounting  degree  and  a  hundred  hours  to  burn  to  
determine  the  true  cost  of  credit  or  to  make  straightforward  comparisons  among  products  to  determine  
something  as  basic  as  which  one  is  the  cheapest.    
 
I  talk  about  significant  changes  that  are  already  in  place  like  the  CARD  Act,  which  was  signed  into  law  by  
President  Obama  in  2009  and  now  bans  some  of  the  most  abusive  credit  card  practices.  Right  now,  that  
law  is  making  millions  of  families  economically  safer.    
 
I  ask  people  to  imagine  what  a  clean,  competitive  credit  market  –  a  place  with  no  fine  print  to  hide  tricks  
and  traps  –  can  do  for  American  families.    
 
I  talk  about  how  this  agency  can  make  families  economically  safer  every  chance  I  get,  but  tonight  I  want  
to  break  some  new  ground.  I  want  to  reflect  on  what  it  means  to  be  at  the  beginning,  to  think  about  the  
possibilities  for  this  start-­‐up  agency.  Pause  to  consider:    we  are  building  a  new  federal  agency  from  the  
ground  up.  We  should  think  broadly  about  credit  and  American  families,  but  we  also  have  a  moment  
right  now  to  think  about  what  it  means  to  build  a  new  agency  in  a  world  where  information  travels  at  
the  speed  of  light.    
 
In  our  early  republic,  the  government  was  not  distant  from  the  people  that  it  governed.  The  New  
England  town  hall  was  emblematic  of  a  world  in  which  those  who  ran  the  government  were  well-­‐known  
as  neighbors,  kinsmen,  and  friends.  This  made  sense  in  a  world  in  which  commerce  was  largely  local:  the  
mill,  the  livery,  and  the  bank  were  just  down  the  road.  Those  who  served  in  government  and  those  who  
needed  the  services  of  government  were  closely  connected.    
 
Fast  forward  to  the  20th  century.  Commerce  was  no  longer  predominantly  local,  but  national.  Industrial  
manufacturing  displaced  the  individual  craftsman,  scientific  management  routinized  creative  work,  and  
finance  began  its  march  toward  consolidation  into  larger  and  larger  banks.  Theodore  Roosevelt  famously  
tried  to  adapt  Washington  to  the  changes  he  saw  in  commerce.  Only  a  strong  national  government,  he  
thought,  could  effectively  balance  against  the  influence  of  powerful  national  industries.  Government  
agencies  were  created,  and  professional  public  servants  began  to  emerge,  working  on  behalf  of  the  
people.  
 
We  may  take  it  for  granted,  but  we  have  all  profited  from  the  rise  of  agencies  watching  out  for  our  
welfare.  The  Food  and  Drug  Administration  monitors  the  safety  of  our  drugs,  the  Consumer  Product  
Safety  Commission  makes  sure  that  toys  covered  in  lead  paint  or  car  seats  that  might  collapse  are  kept  
away  from  our  children  and  grandchildren,  and  the  Environmental  Protection  Agency  tests  the  safety  of  
the  air  we  breathe  and  the  water  we  drink.    

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At  the  same  time,  our  public  servants  have  often  appeared  faceless,  nameless  and  distant—much  like  
the  industries  they  regulate.  In  the  early  20th  century  world  in  which  communication  capacities  had  
increased  only  marginally  from  a  century  earlier  –  a  world  in  which  letters  and  newspapers  were  the  
main  source  of  dialogue  between  agencies  and  people  –  that  structure  was  the  best  we  could  do.  But  
today,  we  can  imagine  an  agency  designed  for  the  21st  century  and  for  our  new  world  of  commerce  in  
consumer  financial  products  and  services.    
 
Today,  information  is  king—but  information  is  not  evenly  accessed  by  all.  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.  
 
We  can  build  a  government  agency  that  is  responsive  to  the  dynamics  of  our  time,  just  as  the  town  
meeting  responded  to  the  18th  century  and  the  classic  government  agency  to  the  20th.  To  get  there,  we  
need  to  re-­‐imagine  the  new  consumer  agency,  using  changes  in  technology  to  propel  us.  I  can  think  of  
no  better  place  to  do  some  re-­‐imagining  than  in  the  Bay  Area,  the  birth  place  of  the  free  speech  
movement  and  the  home  of  so  many  companies  that  have  transformed  the  way  we  communicate  
through  technology.  So  here  are  three  questions  to  get  us  started.  
 
Who  Has  a  Voice?      
 
Let’s  start  with  who  has  a  seat  at  the  table.  The  industry  hires  lawyers  and  lobbyists,  who  produce  
papers  and  research  and  who  monitor  everything  that  happens.  The  industry  pushes  its  views  to  the  
agency  and  to  the  public  about  the  right  direction  for  the  agency,  and,  as  you  might  expect,  the  right  
direction  turns  out  to  be  the  one  that  is  good  for  the  industry.  That’s  the  industry’s  right,  but  for  the  
American  public,  those  who  aren’t  hiring  lawyers  and  lobbyists,  the  field  is  tilted  against  them.  The  
public,  the  people  to  be  served,  far  too  often  fade  into  the  background.      
 
When  an  agency  loses  sight  of  the  public  it  is  designed  to  serve,  academics  say  it  has  been  captured.  
 
The  new  consumer  agency  can  develop  tools  to  help  level  the  playing  field  and  discourage    capture.  The  
American  people  can  have  not  just  one,  but  thousands  of  seats  at  the  table.  Even  before  the  agency  
officially  opens  its  doors,  it  can  solicit  information  from  the  American  people  about  the  challenges  and  
frustrations  that  they  face  with  consumer  financial  products  day  in  and  day  out—and  it  can  organize  
that  information  and  put  it  to  good  use.  Data  from  the  public  can  inform  priorities,  and  it  can  signal  
problems  both  to  consumers  and  businesses.      
 
Information  technology  can  allow  us  to  hang  out  a  virtual  shingle  in  front  the  Agency  and  to  declare  our  
intent  to  the  world.  It's  a  lot  harder  to  let  yourself  fail  –  and  a  lot  easier  for  the  public  to  hold  you  
accountable  –  when  you've  transparently  declared  your  mission  and  shared  information  the  public  can  
use  to  measure  your  success  in  meeting  it.  Technology  can  force  this  agency  to  remain  true  to  its  goals.  
 
Transparency  is  obviously  key,  and  we’re  ready  to  get  started.  As  a  part  of  this,  I  am  committed  to  
making  public  the  advocates,  lobbyists,  and  other  stakeholders  I  meet  with.  Every  year,  we’re  also  going  

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to  produce  an  annual  report  on  what  we’re  up  to:  think  of  it  as  a  State  of  the  Union  for  Consumer  
Financial  Issues.  But  remaining  focused  on  the  mission  requires  more  than  just  transparency—it  requires  
engagement.  So  the  second  thing  we’ll  do  is  make  it  easy  to  interact  with  the  agency.    
 
And  that’s  our  second  question:    How  Can  the  Agency  Use  Information  to  Perform  Better?  
 
In  a  world  of  experts,  it’s  the  experts  that  frame  the  questions  to  be  asked,  isolate  the  problems,  sort  
through  the  data  (if  there  are  any),  and  try  to  design  solutions—always  with  the  industry  looking  on  and  
chiming  in.  But  we  can  do  this  differently.    
 
A  data  driven  agency  won’t  be  about  conventional  wisdom.  It  will  be  about  data.  And  those  data  should  
come  from  many  sources—from  financial  institutions,  from  academic  studies  and  from  our  own  
independent  research.  We  can  reinforce  that  approach  by  making  sure  that  our  analysts  come  from  a  
diversity  of  backgrounds—finance,  law,  economics,  sociology,  housing.    
 
But  we  can  also  gather  data  directly  from  the  American  people  by  asking  them  to  volunteer  to  share  
with  us  the  experiences  they  have  with  consumer  credit  products.  We  can  open  up  our  platform  to  
families  across  the  country  who  want  to  tell  us  what  has  happened  to  them  as  they  have  used  credit  
cards,  tried  to  pay  off  student  loans,  or  worked  to  correct  errors  in  a  credit  report.  We  can  learn  more  
about  the  loan  application  process,  about  what  people  see  on  the  front  end  and  what  happens  on  the  
back  end.  We  can  learn  about  good  practices,  bad  practices  and  downright  dangerous  practices,  and  we  
can  report  on  the  good,  the  bad  and  the  ugly  to  increase  transparency  and  to  push  markets  in  the  right  
direction.    
 
Normally,  agencies  use  supervision  and  lawsuits  to  enforce  the  law.  This  agency  will  do  that  as  the  cop  
on  the  beat  watching  huge  credit  card  companies,  local  payday  lenders,  and  others  in  between.  
Technology  can  help  us  do  that  better,  by  making  sure  our  enforcement  priorities  are  tightly  connected  
to  the  financial  market  realities  as  experienced  by  customers  every  day.    
 
New  technology  can  help  us  supplement  the  cop  on  the  beat  by  building  a  neighborhood  watch.  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.  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.    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  blow  the  whistle  before  the  problem  became  a  national  scandal.      
 
The  agency  may  also  be  able  to  demonstrate  how  incentives  can  change  when  people  are  connected  not  
only  to  the  government,  but  also  to  each  other.  Through  crowd-­‐sourcing  technology,  consumers  can  
deal  collectively  with  those  who  would  take  advantage  of  them—and  can  reward  those  who  provide  
excellent  products  and  services.  Imagine  scanning  a  credit  agreement  and  uploading  to  a  website  where  
software  can  analyze  the  text  of  the  agreement.  A  consumer  could  help  the  agency  spot  new  
agreements  on  the  market  and  customers  could  get  more  information  as  they  make  decisions.    The  new  
CARD  Act  requires  credit  card  issuers  to  submit  their  agreements  to  the  Federal  Reserve  for  posting.    
That’s  a  model  we  can  build  on.  
 
Information  –  fast,  accurate  information  from  a  variety  of  sources  –  has  the  power  to  transform  the  old  
measures  of  agency  effectiveness.      

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And  then  our  third  question:    Who  Has  the  Next  Breakthrough  Idea?  
 
If  any  of  you  have  read  my  academic  work,  you  know  I  built  an  entire  career  on  teasing  out  as  much  data  
as  I  could  about  American  families  and  trying  to  make  sense  of  that  data.  
 
As  a  researcher,  I  understand  that  data  must  always  be  handled  carefully,  and  protection  of  personal  
data  and  proprietary  models  is  paramount.  But  I  also  believe  that  better  data,  made  available  to  the  
media,  private  investors,  scholars  and  others,  will,  over  time,  produce  better  results.  When  data  are  
widely  shared,  others  can  use  those  data  to  uncover  new  problems,  to  frame  those  problems  in  
different  ways,  to  propose  their  own  public  policy  solutions,  and,  for  the  entrepreneurs  in  the  group,  to  
develop  their  own  private  apps  to  create  something  of  value.  I’ve  seen  some  good  ideas  in  my  time,  and  
I’ve  learned  that  those  ideas  can  come  from  unlikely  places.  I’m  hopeful  that,  as  we  drive  consumer  
credit  markets  toward  working  better  for  families,  the  new  consumer  agency  will  be  smart  enough  to  
encourage  –  and  then  to  build  upon  –  good  ideas  that  come  from  far  outside  the  government  sphere.  
 
Think  for  a  minute  about  how  more  and  better  data  might  have  helped  us  avoid  the  housing  finance  
crash  of  2008,  a  crash  that  has  resulted  in  millions  of  foreclosures  and  cost  American  families  trillions  of  
dollars.  Better  access  to  better  data  could  have  empowered  those  on  the  outside  to  blow  the  lid  off  a  
faulty  housing  model,  and  to  do  it  before  terms  like  “too  big  to  fail”  were  part  of  our  everyday  
vocabulary.    
 
These  are  only  three  ideas,  but  notice  how  they  work  together.  An  agency  that  isn’t  captured  by  industry  
can  write  better  rules  and  enforce  those  rules  more  vigorously.  An  agency  that  shares  data  is  an  agency  
that  is  harder  to  capture.  And  an  agency  that  learns  from  families  is  an  agency  that  can  make  markets    
work  better.    
 
We  fought  hard  to  get  here,  and  those  who  tried  to  block  the  agency’s  creation  have  already  said  that  
they  will  be  back.  Every  day,  they  spend  money  to  find  a  way  to  cut  back  the  agency’s  power—even  
before  its  work  has  begun.  
 
But  we’re  scrappy—partly  because  we  have  no  choice.  This  agency  can  succeed.    More  importantly,  it  
must  succeed  because  we  are  running  out  of  options.        
 
For  more  than  a  generation,  we  have  witnessed  a  steady  deterioration  in  the  economic  security  of  the  
middle  class.  Flat  wages  and  rising  core  expenses  caught  families  in  the  cross-­‐fire,  and  millions  turned  to  
debt,  only  to  learn  that  the  friendly  advertisements  were  too  often  an  invitation  to  disaster.      
 
We  are  in  an  economic  crisis,  but  remember  that  it  is  a  crisis  that  has  been  decades  in  the  making.  Long  
ago,  when  America  was  committed  to  a  robust  middle  class,  an  economic  boom  meant  prosperity  for  
working  people.  In  the  boom  of  the  1960s,  for  example,  median  family  income  rose  37  percent.  But  by  
the  2000s,  economic  expansion  meant  prosperity  only  for  the  few.  In  the  boom  that  preceded  the  crash  
of  2008,  median  family  income  rose  a  paltry  1.9  percent.  Worker  productivity  went  up,  and  those  at  the  
top  got  wealthier  and  wealthier,  while  those  in  the  middle  were  barely  holding  on  to  their  old  
paychecks.  Think  about  that—37  percent  real  income  growth  in  good  times  in  the  1960s,  1.9  percent  
real  income  growth  in  the  good  times  of  the  2000s.  Anyone  who  wants  to  understand  why  America’s  
middle  class  is  not  bouncing  back  from  the  2008  crash  should  remember  that,  unlike  in  early  boom-­‐and-­‐

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bust  cycles,  middle  class  families  had  no  parachutes  when  they  were  pushed  off  a  cliff  in  the  Great  
Recession  of  2008.  
 
Today’s  families  have  spent  all  of  their  income,  spent  all  of  their  savings,  and  taken  on  debt  to  pay  for  
college,  to  cover  serious  medical  problems,  and  just  to  stay  afloat  a  little  while  longer.  Although  some  
economists  tell  us  the  recession  is  over,  we  all  know  the  economic  pain  is  not.    And  we  see  that  whether  
we  measure  in  unemployment  or  foreclosures,  whether  we  count  in  the  small  businesses  or  students  
who  cannot  get  loans,  whether  the  metric  is  home  sales  or  manufacturers'  inventory.    
 
Families  have  been  pushed  and  squeezed  and  hammered  for  a  generation,  but  we  have  a  moment  –  
right  here,  right  now  –  to  turn  a  corner.  The  new  consumer  agency  won’t  fix  everything,  but  it  gives  us  
the  opportunity  to  help  plug  a  hole  in  the  bottom  of  the  economic  boats  of  America’s  families.  We  have  
a  moment,  in  one  very  tangible  way,  to  make  something  better  for  millions  of  hard-­‐working,  play-­‐by-­‐
the-­‐rules  people.    
 
A  new  baby  and  a  new  agency.  The  task  before  us  is  great,  but  I  am  filled  with  hope—and  
determination.  
 
Thank  you.