Warren: Regulation will help customers and banks

NEW YORK (CNNMoney.com) -- Elizabeth Warren, the newly appointed adviser to help get the Consumer Financial Protection bureau up and running, says consolidation of financial regulation will be beneficial to both banks and their customers.

"Instead of seeing banks as their friends, as I did when I put my babysitting money in a savings account at Penn Square National Bank so my brothers didn't borrow it out of my sock drawer, too many Americans see dealing with banks like handling snakes - do it long enough and you'll get bit," she said in a speech Wednesday to the Financial Services Roundtable in Washington.

She said the new law will force banks and non-bank lenders to be subject to federal examination and will consolidate consumer financial protection activities performed by seven different agencies into one agency, "closing gaps in oversight."

Warren said the purpose was to make these lenders more palatable and user-friendly for the American people.

"Thanks to the new law, for the first time ever, we will have a single federal agency charged with writing the rules for all mortgages and all credit cards, regardless of whether they are issued by a federally chartered bank, a state chartered credit union, or a group of unlicensed investors," said Warren, in her speech to the Financial Services Roundtable.

President Obama on Sept. 17 announced his appointment of Harvard law professor Warren to a key role in crafting the consumer financial bureau that was originally her idea.

The choice was a contentious one. Rep. Barney Frank, D-Mass, who runs the House financial panel, applauded her appointment. But some Republicans opposed Warren's position because it gave her responsibilities at both the White House and the Treasury Department.

Warren's new Treasury job prompted her to give up her position running the Congressional Oversight Panel, which monitors the $700 billion bank bailout.

Her appointment does not mean that she will be the official director of the bureau once it's up and running in 10 months. But she will have a say in who gets the job, Obama said.