A leading candidate to head the new Bureau of Consumer Financial Protection is Elizabeth Warren, although her potential nomination is not without controversy. Writing on CNN Money.com, Katie Benner says “Detractors say that Warren lacks experience, that she’s not impartial, and that she could make it so expensive to extend credit that only the richest Americans and biggest businesses could get a mortgage, a credit card or a loan. But these knocks against Warren obscure the likely impact that she would have on the bureau. And mostly, they are straw men.”
Warren is a Beltway outsider and a Harvard law professor. She did take leave in 2008 to head the Congressional Oversight Panel (COP), which evaluates TARP and oversees the Treasury Department. Since its inception, the COP has published 22 detailed reports with little dissent, despite multiple differences of opinion regarding economics and politics among the staff members. Ken Trotske, an economist who serves on the panel, describes Warren as a consensus builder. “I’m in awe of the work they turn in to meet that schedule, because it’s a demanding schedule.”
In its two years of existence, COP has become an intellectual hub in Washington, D.C.’s efforts to understand the relationship between the federal government and Wall Street. According to Benner, “The outcry over Warren’s impartiality is a through-the-looking-glass twist on the current state of our regulatory affairs. It bears repeating that it’s a good thing for the head of an agency designed to protect consumers to actually put the interests of consumers first. For the last few years, as was made imminently clear by the implosion of 2008, Wall Street regulators were doing anything but regulating.”
In Benner’s words, “Someone like Warren is a shock to that system. She unabashedly sides with consumers. She hates fine print and contracts with ‘gotcha’ clauses. She wants to eliminate predatory loans. And she thinks that it’s okay for bank profits to be crimped in service of a level playing field between borrowers and their lenders.
A decade before the financial meltdown, one woman was sounding the alarm that a catastrophe was coming.