The folks over at the Cambridge Winter Center -- a nonpartisan think tank that does its thinking about U.S. financial services policy -- have offered up a new paper that lays out "Six Commandments" to help the new Consumer Financial Protection Bureau be successful in its first year.
The commandments, set in stone by Tim Duncan, a long-time finance executive and chairman of American Business Leaders for Financial Reform, are as follows:
#1 – In Six Days You Shall Make the Heaven, Earth and Sea
Leaders of the new consumer agency must focus on swiftly accomplishing a few high-profile things to establish its reputation and create public support. “Building the agency for the long term should not be ignored, of course, but longer-term goals cannot be allowed to crowd out the real need for quick, tangible progress,” the Cambridge Winter report says.
#2 – Thou Shalt Not Hire People Just to Fill an Organization Chart
Recruiting a high quality, high performing staff of about 2,250 people is crucial to launch the new agency, the report says. “To recruit successfully, the agency’s leaders will have to be passionate about the agency and its mission and ensure that potential employees share this passion… If it is not patient, the CFPB could risk being staffed largely by ambivalent cubicle dwellers waiting out their federal retirements at a weak and directionless agency.”
#3 – Thou Shalt Not Worship Consultants
Consultants bearing mission statements, strategic metrics, key performance indicators, and other business school jargon can obscure what the new agency really ought to be focusing on, the report says. “The passion and spark that will drive the agency must come from the heart of the employees. Catchy pseudo goals should not replace the genuine desire to make a change in people’s lives.”.
#4 - Honor Thy Fellow Agencies
The new Consumer Financial Protection Bureau should beware of feuding with other agencies, such as the Fed, which provides its annual budget, the report says. "In addition to the transfer of employees and various functions, the CFPB will be intertwined with other agencies in many ways for years to come... The CFPB will need to work with the FTC extensively to tap into its system for receiving consumer complaints, and its network of state and local authorities. The FTC also retains concurrent jurisdiction in some areas."
#5 - Worship Technology from Day One
Unlike other federal agencies that have had to spend lots of money to adapt to the digital world, the report notes that the Consumer Financial Protection Bureau can design itself from the outset to take advantage of the Internet. "Many of the CFPB’s functions -- like receiving and processing consumer complaints, registering small financial companies and analyzing thousands of credit contracts -- can be done more efficiently using the Internet and new technologies... But to use technology effectively, the management of the agency will have to make it a priority at the outset."
#6 - Thou Shalt Covet Research
The Dodd-Frank law requires the new agency to set up a division for empirical research, and if managed right, the report this could promote a fact-based approach to rulemaking. "The massive amount of data currently disclosed to consumers may indeed contain the necessary information to make wise decisions, but the context, verbiage and volume often make such documents useless -- or worse. The CFPB will have the opportunity to make disclosure requirements more useful, by conducting and applying empirical research (and, hopefully, common sense)."