Interview on ABC's "Good Morning America"

Jake Tapper: In an exclusive interview with "Good Morning America's" consumer correspondent, Elizabeth Leamy, President Obama explained how he told Sherrod he related personally to her speech, the full one, not the unfairly edited excerpt.

The President: One of the things I shared with Ms. Sherrod was the fact that the stories that she was telling about her own biases and overcoming them, those are actually good lessons for all of us to learn because we all have biases. I've written about these in my book.

Jake Tapper: That's a reference to his memoir "Dreams from my Father," where he wrote about being the son of a black father and white mother.

The President: I learned to slip back and forth between my black and white world's understanding that each possessed its own language and customs and structures of meaning. As I was growing up, there were times where I had stereotypes, both about blacks and whites, that you had to work through and admit to yourself.

And the more you were willing to bring those things up to the surface, the more you could identify them as being wrong and move beyond them.

Jake Tapper: But the president told Leamy there is, today, a lot celebrate when it comes to racial relations.

The President: We should acknowledge the enormous progress that we've made since the time that Shirley Sherrod was a child in the Jim Crow South. That's real progress. I'm sitting here as a testament of that as president of the United States.

. . . .

Elisabeth Leamy: What I have here is the Wall Street Reform and Consumer Protection Act --

The President: Don't hurt yourself. [Laughter.]

Elisabeth Leamy: And it is a thick one.

The President: Right.

Elisabeth Leamy: And we counted. And 10 sections deal with things like derivatives and systemic risk. And five talk about credit scores and mortgages.

The President: Right.

Elisabeth Leamy: Persuade me that this law matters to ordinary Americans.

The President: Oh, it matters in so many ways. On mortgages, on credit cards, on student loans, on pay-day loans, on a whole host of credit issues, the consumer is going to now not only have more security and protection but they're also going to have somebody whose sole job is to look out for them at the federal level and, hopefully, they're going to be saving money.

Elisabeth Leamy: You've called this the strongest consumer financial protection system in history. Sometimes that brings unintended consequences. And, already, the credit card companies are starting to bring back annual fees. And the banks are doing away with free checking.

What kind of recourse do consumers have when that happens?

The President: Well, one of the things that we encourage in this reform is just better information. So much of what needs to be done in the consumer area is to empower the consumer so that they can make good choices.

Elisabeth Leamy: One of the elements of the new law is this consumer financial protection bureau this, as I understand it, was the brainchild of Harvard Professor Elizabeth Warren. And people in your own party are hoping that you will nominate her to head that agency. On the other hand, big business is adamantly opposed.

So everybody wants to know will you nominate Elizabeth Warren to head this agency that she thought of?

The President: I have the highest regard for Elizabeth.

We have not made a decision about who we're going to appoint yet. But here's my guarantee is that Elizabeth is going to be working with me, working with Tim Geithner, the Treasury secretary, to help in thinking about how do we make this consumer agency as effective as possible, looking out for consumers. She is going to be actively involved in that process.

Elisabeth Leamy: I want to ask you what are you and the first lady teaching your daughters about money?

The President: You know, it's a great question. What I'm doing now with Malia and Sasha is they're getting an allowance. They're starting to get old enough where they may be able earn some money babysitting. They've got their own savings accounts.

Elisabeth Leamy: I've got a job for them babysitting.

The President: There you go. [Laughter.]

And what I'm trying to explain to them are basic concepts about savings, about interest. If they keep a hundred dollars in their bank account at 2 or 3 percent interest for six months, this is how much money they're going to have at the end of it.

Elisabeth Leamy: Has your own retirement fund taken a hit? In other words, can you feel the pain directly that other Americans are feeling?

The President: Well, part of it has. That part that is devoted to Malia and Sasha's college fund, that goes up and down with the stock market, and so it's lost value like everybody else. You know, Michelle's mom has savings that have been affected.

So, you know, one of the reasons I think that issues like consumer financial protection are so important to Michelle and myself is we're just not that far removed from what most Americans are going through.

I mean, it was only a few years ago when, you know, we had high credit card balances, we had two little kids that we were trying to figure out how to save enough for college, we were still thinking about our own retirement and looking at our retirement accounts and wondering are we going to be able to get enough assets in there to make sure we're protected.

Elisabeth Leamy: You passed health-care reform.

The President: Right.

Elisabeth Leamy: You passed financial regulatory reform, this historic legislation. And yet the latest poll shows your job-approval rating hitting a new low of 44 percent. And many people say this apparent paradox is because of the economy.

So what I'm wondering is has the economy gone from being something that you inherited to becoming your own problem?

The President: Oh, I think that happened the day I was sworn in. [Laughter.] I think that we are on the right path. We're moving in the right direction. But it's hard, and people are going to be impatient, understandably.

Because if you don't have a job right now or if you are trying to figure out how to pay the bills, you know, even if you hear the president say we're on the right track and we've improved, you're still going to be frustrated about how slow the progress is.

But the fact that we have elevated reform, made college more affordable, all those things are going to help make America more competitive over the long term. And that's how I judge myself and, hopefully, that's how I'll ultimately be judged.