Are congratulations in order?
Consumer groups are applauding the news that Harvard University law professor Elizabeth Warren may soon take over the early development of the new Consumer Financial Protection Bureau.
It isn’t official yet and the whole thing seems like a kind of back door way to get Warren into a position to run the consumer financial agency — or influence its early startup.
The new consumer financial watchdog agency will have broad powers to oversee credit cards, consumer loans, mortgages and a host of other financial products. It was approved as part of the massive Wall Street reform bill and signed into law in July 2010 by President Obama.
Is she or isn’t she in?
But since the new consumer agency will assume duties currently held by several existing federal agencies (such as the Federal Reserve, Federal Trade Commission, Comptroller of the Currency and the Office of Thrift Supervision, to name a few), it will take a least a year before consumers see any noticeable changes in how financial products are monitored. Obama has yet to officially nominate a director, who would have to be confirmed by the U.S. Senate.
The New York Times, CNN and other news organizations reported Thursday that Warren will be named to a top White House position sometime this week. UPDATE: The White House blog confirms Warren’s appointment as assistant to the President and adviser to the Treasury Secretary on the Consumer Financial Protection Bureau.
That job does not require Senate confirmation hearings or approval — a process that many predicted would be long and combative. While Warren has her supporters, there are many who would oppose her appointment as the chief consumer financial watchdog.
ABC News’ Rick Klein talked to New Hampshire Republican Sen. Judd Gregg, who called Obama’s apparent attempt to do an end-run around Senate approval of a director “a terrible adulteration of the process.” Gregg told ABC he was concerned that Warren would promote a “social justice” agenda were she to become the new director.
By making Warren a senior White House staff member — and assigning her to work with the U.S. Treasury Department to get the ball rolling on the mountain of tasks the new agency faces — Obama will speed things up a bit.
Consumer agency was Warren’s brainchild
Warren, who is widely credited with developing the concept of a consumer financial protection agency, is an expert on bankruptcy law and a champion of consumer rights. She currently heads a special Congressional panel set up to oversee efforts to revamp the troubled asset and bailout programs following the 2008 Wall Street implosion. Those pushing for her appointment as director of the consumer watchdog agency say she’s a natural fit for the job.
White House Press Secretary Robert Gibbs told reporters during Wednesday’s daily press briefing: “I think obviously she is among the people that the President is looking at to implement the provisions of the legislation that Congress passed.”
Warren had this to say about her appointment in her first official statement issued on the White House blog:
“The new consumer bureau is based on a pretty simple idea: People ought to be able to read their credit card and mortgage contracts and know the deal. They shouldn’t learn about an unfair rule or practice only when it bites them–way too late for them to do anything about it. The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market. The time for hiding tricks and traps in the fine print is over. This new bureau is based on the simple idea that if the playing field is level and families can see what’s going on, they will have better tools to make better choices.”
Several consumer groups issued statements Thursday supporting Warren’s new White House job. From Lauren Saunders, of the National Consumer Law Center:
“We at the National Consumer Law Center have worked with Elizabeth Warren for years and are excited that she will be instrumental in setting the course for the Consumer Financial Protection Bureau. Elizabeth has a deep understanding of the needs of consumers and the ways in which the financial system has let them down. Elizabeth is the right person at the right time to implement her original vision for an effective agency that will put consumers first and prevent the recent failures that have wrecked havoc with American families and our economy.”
From Lisa Donner, executive director of Americans for Financial Reform:
“Elizabeth Warren is exactly the right person to set the new Bureau of Consumer Financial Protection on the right course: putting the public interest first and standing up to unfair tricks and traps from big banks and financial industry special interests. Praised by experts across the political spectrum, she has been an effective, independent, and tireless fighter for American families, and she is the leader the bureau needs. As financial reform moves through the treacherous path of regulation writing, Wall Street is busy trying to thwart regulators from doing the job Congress laid out — keeping the big banks in check. With Elizabeth Warren leading the way, and the public keeping up its vigilance, they will not succeed. Reporting to the president, Professor Warren will be a strong voice at the White House for families and for financial reform that works.”
Opponents, however, say conservatives and senators backed by the banking industry lobby will never accept her. Sen. Christopher Dodd, the Democratic chairman of the Senate Banking Committee, expressed concern about how the White House is handling Warren’s new role. He told reporters that lawmakers who supported creating the agency have reservations about putting Warren in an interim role.
“We need a director,” Dodd told reporters Thursday. “And you need someone that’s confirmable. And anything short of that, I think, you put this bureau in some jeopardy. Without it being established and up-and-going, it’s vulnerable.”
He added: “We still need a nominee. I hope that they send up a nominee sometime in the next few weeks, even in the lame duck, I don’t see why [we] can’t have hearings and consider who should actually run the place.”
There has been speculation that Michael Barr, assistant U.S. Treasury Secretary, might be in the running as the consumer financial protection czar. It’s not clear if Warren’s new White House job means Barr’s name is no longer in play.
See related: Obama reveals his own credit card woes, Consumer financial protections at least a year away