Banks' Image Is — Literally — Toast

Elizabeth Warren's fight for consumer protection is redefining a lot about banking - including its most iconic image.

The free toaster symbolized a simpler era, long before anyone heard of reward points, when customers felt their banking relationship paid tangible dividends. But that was before Warren employed the analogy of the "exploding toaster" in calling for what became the Consumer Financial Protection Bureau.

Warren wrote in the journal Democracy in 2007 that "it is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house" but someone could "refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street-and the mortgage won't even carry a disclosure of that fact to the homeowner."

The concept has caught on. During a symposium last week about the CFPB, law professors invoked it several times.

"The power of the analogy is the focus on danger," Jean Braucher, a law professor at the University of Arizona James E. Rogers College of Law. "There is danger from consumer credit products, and the toaster at its origins was a very dangerous product. People died from toasters."

Warren, who is law professor at Harvard University and is running for a U.S. Senate seat in Massachusetts, wrote in the Democracy article that an agency had to be established to protect bank customers from bad financial products in the same way that there is a safety commission for appliances and other consumer products.

Consumers may not appreciate what greater consumer product safety regulations mean in their daily lives, Braucher said.

"In some ways, credit products are like toasters. They are certainly complicated," said Braucher, who noted that toasters have 400 parts. "We may think of credit cards as really simple but they are not and the features of them are not simple."