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Elizabeth Warren Tapped to Create Consumer Financial Protection Bureau
President Barack Obama’s decision to name Wall Street’s archenemy Elizabeth Warren as his special advisor to direct the creation of the Consumer Financial Protection Bureau bypasses the often confrontational Senate confirmation process. The Harvard law professor is now tasked with building a new government agency that will crack down on abusive financial practices such as mortgages and credit cards from the ground up. President Obama – who has known Warren since his law school days – has named her “assistant to the president” — a desirable title in inner White House circles. Warren will report directly to both the president and to Treasury Secretary Timothy Geithner. Importantly, Warren will have direct access to the president, making her, in effect, the Secretary of the Treasury overseeing all consumer lending.
By naming Warren an adviser rather than as the agency head, President Obama avoided the congressional confirmation process, which Republicans likely would have used to derail the nomination. “Clearly putting her in this role cements her imprint on the agency, whether she ultimately leads it or not. It also implies there’s going to be a transfer of power from the other regulators sooner rather than later. I think it would be better, though, for the agency to have a Senate-confirmed agency head, if that’s even possible,” said Ed Mills, an analyst with FBR Capital Markets.
Wall Street’s reaction was predictable, given Warren’s unpopularity there. “It’s a thumb in the eye to people trying to address real issues,” said Matt McCormick, a portfolio manager and banking analyst with Bahl & Gaynor. “It is obviously more political than focused on correcting ills of what happened in the financial industry. I really doubt she will have the ability to bring people together considering the political nature of her appointment. It is troubling.”
“The Consumer Financial Protection Bureau will empower all Americans with the clear and concise information they all need,” President Obama said at the Rose Garden announcement. “Never again will folks be confused or misled by the pages of barely understandable fine print that you find in agreements for credit cards or mortgages or student loans.”