In a telephone press conference for college journalists, an economic adviser to President Barack Obama said Tuesday that recent reforms to regulate the financial industry would benefit young Americans.

Elizabeth Warren, the economic adviser and head of the new Consumer Financial Protection Bureau (CFPB), spoke on the current economic climate in relation to students, stressing the new regulations for credit cards and private student loans.

She said that the CFPB would better regulate credit card companies by enforcing a new ban on arbitrary rate hikes and providing improved clarity on credit card interest rates and contracts. Warren said that some contracts are not designed to be read and that the new agency would work on making them easier to understand.

‘Anyone who uses the final product ought to tell the cost and risk,’ she said.

Warren also noted that the agency would have the tools to ‘combat abusive practices that harm consumers,’ such as arbitrary spikes in an individual’s interest rate.

Pertaining to private student loans, Warren insisted that the new laws would enable the agency to fight unfair lending practices.

She noted that the CFPB will ‘review the process used [by the lender] in the calculation and collection of debt, and work to rebalance the power between the borrower and the lender.’ She said that private student loans constitute the largest unregulated debt collection activity in the country.

Warren also stated that individuals who take out high-priced student loans in the current market are ‘pretty much on [their] own,’ and added that the CFPB would provide consumers with better tools and choices to make future loans more fair.

The transparency in the private student loan market would also impact the rising tuition costs. Warren said that as the cost of some loans becomes clearer to students, the government becomes more pressured to control the rates of increase.

The new regulations on student loans, parts of which stem from the health care bill, also promote a set of interest-rate reductions in the student loan market by eliminating private banks’ roles as middlemen in the transactions between the federal government and the student.

Dennis Chavez, director of Financial Aid and Student Records, noted that the new regulations on student loans will have little impact on Binghamton University, because the school is already compliant with the Department of Education’s student loan process.

Warren noted that the reforms would promote financial stability, which then revitalizes communities throughout the nation by encouraging financial growth.

‘Greater financial stability should result in small risk premiums and therefore lowering the cost of borrowing. This, in turn, should enhance economic growth,’ said Dennis Lasser, an associate professor of finance and the director of the Zurack Trading Room and Investment Fund, an investment fund run by students that currently has $155,000 in assets.

Addressing a question of how the CFPB will allocate its research budget, Warren admitted that the agency does not have a complete plan, but is designing its research division to include both sources within the agency and outside research facilities. Warren, a professor herself, noted that the agency will integrate more professors into its structure.

Warren also specified that the agency would have an office that would promote financial literacy and educate consumers to make smart financial choices, saying that ‘Americans need more financial education.’

Emphasizing that the new regulations will not impede personal responsibility of students, Warren noted that ‘this is about helping personal responsibility ‘ for personal responsibility, you need to be able to read the contract and compare one product with another.’

Once the implications of the financial product are clear, Warren stated that it is then the student’s part to make good decisions.

The timing of the conference ‘ exactly a week before midterm elections ‘ and its intended audience may be a sign of an effort to mobilize young Democratic voters. But John McNulty, an assistant professor for political science at BU who specializes in American politics and political behavior, questioned whether the tactic could be successful.

‘If this is the best idea for motivating college-age students, [then] it’s not promising for [for the Democrats on] Nov. 2,’ he said.