Mary Warren 
Class of 1981
Financial Services

If Mary Warren ’81 had her say, financial literacy would be a required course in all schools.

As senior litigation counsel for the Consumer Financial Protection Bureau in Washington, D.C., Warren holds institutions accountable for their policies and practices. Her work with the agency also has given her insight into the importance of educating and empowering consumers to make better-informed financial decisions.

Warren wishes she had understood even fundamental financial practices when she got her first job after graduating from Harvard University in 1985.

“I had one of the best educations money can buy and I was very ignorant about the topic,” she said. “I didn’t know how to manage my credit cards. I didn’t understand that you should make the minimum payment on your credit card until my dad told me one day. I used the loan function (on my checking account) and didn’t understand I had to pay that back. I didn’t understand basic things.”

While she learned her lessons “the hard way,” she got her finances on track by the time she got out of law school and started her real career, she added.

Warren represents the fourth generation of her family to attend the University of Michigan Law School. After graduating in 1992, she began working as a litigation associate at the law firm of Shearman & Sterling in New York City. Her clients were banks and large corporations. She became a partner in the early 2000s, but in 2015, she changed course.

“I felt like I’d done the Wall Street lawyer thing and I really loved it, but I was getting tired of it for a number of reasons,” Warren said. “I thought, you only have one life.”

She left the practice and landed in Washington, D.C. at the Consumer Financial Protection Bureau (CFPB,) created by Congress and President Barack Obama after the financial crisis of 2008 to represent the interests of consumers in connection with financial products average people use in their day-to-day lives — bank accounts, credit cards, home mortgages, student loans, auto loans and payday loans.

“Why was this created after the financial crisis? It’s because regular people got hammered after the financial crisis, especially people who had mortgages, and all of a sudden, they had no equity anymore and were upside down on their mortgages,” Warren said.

Before the financial crisis hit, responsibility for enforcing laws about credit cards or bank accounts was distributed among a variety of agencies, such as the Federal Reserve Board, the Federal Trade Commission, what used to be the Federal Home Finance Agency and the FDIC, among others.

This wasn’t these agencies’ primary purpose, however. Consumers also don’t understand the penalties involved for missing payments or “how many entities there are out there who are just trying to make a fast buck on consumers,”

Warren said. “Whole industries spring up around distressed consumers to try to make money on them to supposedly fix their problems.”

Her advice to consumers is to ask lots of questions and not stop with the first answer. She also recommends staying on top of bank accounts and credit cards and knowing what financial institutions are charging and why.

“If you have debt, your primary goal in life should be to get out of that debt,” she said. “… If you do have debt that’s going to take a long time to pay off, be on top of what interest is being charged and what the basis of it is and call either your lender or your servicer regularly.

“If you’re asking for a forbearance on your loan, you should know exactly what that means,” she continued. “Does that mean that the interest accumulates and it capitalizes on your loan balance? Or are they going to give you a deferment, which is different from forbearance and means the interest doesn’t accrue? You’ve got to ask about those things and understand them and take notes.”

While Warren admits, she didn’t learn about financial literacy while a student at ULS, she received “a fantastic education” in every other respect. Her Liggett years also inspired her love of languages, particularly Latin.

Latin was required in sixth grade when she was a student, but she opted to continue through 12th grade. While still in high school, she attended summer school at Harvard and studied ancient Greek. She majored in classics at Harvard and credits her teacher, Elizabeth Ferguson, for sparking this passion.

Other highlights were her English classes and playing field hockey with longtime ULS athletic director Muriel Brock as her coach.

As a Liggett “lifer,” Warren said she has many fond memories from her ULS days. If she could give one thing in return, it would be to equip future generations of graduates with financial literacy as one more tool for long-term success.

“The Federal Reserve Board oversees the entire economy,” Warren said. “They are not going to put whether a bank is charging too high of a debit fee on your bank account at the top of their priority list. The same was true of these other agencies; they all had other missions. Consequently, almost nobody was paying attention to whether lenders were complying with these laws or whether they were basically ripping consumers off or whether, when the financial crisis hit, they were unfairly enforcing their own rules against consumers when the consumers might have had a legitimate reason not to be penalized.”

Once the bureau was created in 2011, Congress transferred jurisdiction of all these laws to the CFPB. As an enforcement officer, Warren splits her time between investigations and litigation.

“If we do either settle or win a judgment, those funds go into what’s called a Consumer Penalty Fund,” she said. “We don’t keep any money; we distribute it to the harmed consumers.

Since its founding, the bureau has returned about $12 or $13 billion to consumers.”

The bureau's consumer response arm analyzes the complaints, identifies trouble spots, manages a database of complaints, helps with individual response, and provides financial literacy for consumers, encouraging them to become knowledgeable about the products they’re using. It also has developed a curriculum for schools.

Supervision is responsible for identifying violations within large institutions. When violations are identified, the agency seeks to cure them without litigation and implement better practices. However, sometimes those violations end up in enforcement or litigation.

Warren added that a rule-making part of the agency proposes rules to govern these financial products.

“We have a whole bunch of PhDs who study the markets so that ideally the rules that my agency proposes and implements won’t have unintended consequences on the markets. You’re always walking a line. If you propose a new rule or law, no one has a crystal ball as to exactly how it’s going to play out, but we have this whole team of brilliant people to make sure it plays out in a good way.”

A common refrain in Warren’s work is that consumers’ lives can be damaged if they don’t understand what they’re getting into. This includes student loan debt.