Consumer Financial Protection Bureau to take over home of failed regulatory agency
The new agency created to protect consumers in the financial marketplace will be housed permanently in the soon-to-be-vacated home of a regulator that is being shut down largely because of its failure to protect average Americans from the subprime mortgage crisis -- the Office of Thrift Supervision.
The Treasury Department announced the move Friday.
The Dodd-Frank financial reform law enacted last year created the Consumer Financial Protection Bureau and ordered the closure of OTS, which regulates the savings and loan industry. Much of the agency's functions and staff will be absorbed later this year by another banking regulator, the Office of Comptroller of the Currency.
The new consumer bureau will move in next year.
The OTS building is located across the street from the White House complex in downtown Washington, giving the Consumer Financial Protection Bureau a prominent location.
"The White House is one of the most frequent destinations for tourists who come to Washington -- if only just to walk by and to get a picture taken," Elizabeth Warren, the White House and Treasury advisor who is setting up the new consumer agency, said in a blog post Friday. "Our vision is a building nearby that is the clearly identifiable home of the Consumer Financial Protection Bureau."
Warren and the growing staff of the bureau are working several blocks away in temporary quarters in a nondescript office building. Warren said the OTS building is "pretty dated, and it needs considerable renovation to update it to current energy and environmental standards."
The Treasury Department said the building would have about 300,000 square feet of usable space when the work is done, but did not give a cost estimate. The agency will have about 1,200 full-time employees by 2012.
One feature being planned is a first-floor lobby that will hold "regular educational programs, including interactive kiosks and 21st century learning centers," the Treasury said.
"We want the building to have as much public space as possible. We're hoping that we can open up parts of the lobby and the adjacent patio for families and service groups, for foreign visitors and local school kids, for anyone who comes to town," Warren said. "This agency belongs to the American public, and we want the American public to be welcome."
The OTS was created in 1989 during the savings and loan crisis to replace the previous regulator, the Federal Home Loan Bank Board. But the OTS was sharply criticized for not doing more to curtail the risky subprime lending that led to two of the biggest bank failures of the housing market crash, the former IndyMac Bank of Pasadena and Washington Mutual Bank.
-- Jim Puzzanghera
Photo: The Office of Thrift Supervision headquarters in Washington. Credit: laudu, via Flickr