Last month President Obama signed into law the Financial Regulatory Reform bill that left us Surrendering to the Worst. But one of the very few positives of that bill was the formation of a consumer financial protection bureau to oversee some of the worst lending practices that contributed to the housing bubble and collapse.
The consumer protection bureau was the brainchild of Elizabeth Warren, a bankruptcy expert, consumer advocate and Harvard Law Professor who lobbied heavily for the creation of bureau. So naturally, Ms. Warren seemed the obvious, as well as the ideal, person to head the new consumer protection bureau.
Pressure mounts for ‘Sheriff’ Elizabeth Warren says Jennifer Liberto at CNN Money:
Last week, 43 House Democrats sent a letter to President Obama, asking him to nominate Warren and requesting a meeting at the White House to discuss Warren’s appointment.
“You have an opportunity to appoint to head this body a true visionary — not the usual Washington careerist. You have an opportunity to appoint to this body the single best-qualified choice,” said the letter, signed by Rep. Barney Frank, D-Mass., and Rep. Carolyn Maloney, D-N.Y., among others.
But Ms. Warren hasn’t exactly made friends with the powerful Banking community or the Treasury Department in her role as Chair of the Congressional Oversight Panel for TARP (Troubled Asset Relief Program).
From the moment the bill was signed into law the Obama administration was quick to point out Warren isn’t the only candidate for the director job. And even some congressional allies began sounding like detractors. Chris Dodd, chairman of the Senate Banking Committee warned Warren’s nomination could cause a protracted and lengthy battle in the Senate. And he has repeatedly questioned whether Warren has the appropriate management skills to lead a large federal bureaucracy.
As Shahien Nasiripour at Huffington Post explains Dodd Questions Elizabeth Warren’s Management Experience — A Concern He’s Never Raised Before
… it’s the first time Chairman Dodd has publicly raised such an issue when it came to evaluating presidential nominees to agency positions under the banking committee’s purview.
A review of transcripts from past confirmation hearings shows that Dodd has never questioned the management experience of nominees to head federal agencies his committee oversees. The heads of the Securities and Exchange Commission, Department of Housing and Urban Development, Federal Housing Administration, the Export-Import Bank and the National Credit Union Administration all survived hearings under Dodd’s chairmanship without him once asking a question about the experience needed to guide their respective agencies.
Nor did Dodd raise any management questions when prospective bank regulators came before his committee — even when the regulators did not have significant management experience. In the two years prior to his assuming the chairmanship in 2007, the heads of the Federal Reserve, the Federal Deposit Insurance Corporation, Office of Thrift Supervision, Office of the Comptroller of the Currency, and a prior chief of the SEC all came before his committee. Each time, Dodd declined to ask about their experience running bureaucracies, a review of transcripts shows.
In fact, Dodd didn’t even show up for two of those hearings.
Two names that are bandied about to the director Michael Barr, a top lieutenant to Treasury Secretary Timothy Geithner, and Eugene Kimmelman, a top lawyer in the Justice Department. But a third might win the prize.
In Obama & Frank: double dips and Washington exit strategies, Christopher Whalen
It is becoming clear that the Obama Administration may not pick a candidate for the CFPB job until after the November election in order to dodge this very political issue. By holding the voting on the new agency head until after the election, members of both parties will be able to extract maximum contributions from the banking lobby. But I hear that the choice may have already been made.
It may surprise some observers that House Financial Services Committee Chairman Barney Frank may want the CFPB job for himself. Frank reportedly has already expressed interest to the White House. Sad to say, Chairman Frank probably has seniority over Chairman Warren.
“Barney did some heavy lifting,” says a source on the committee who is close to Frank. “He might want a different gig, especially if he loses the chairman’s seat in November. Frank would not want to hang around in Congress as part of the minority. Being the first CFPB emperor, however, could be a more interesting gig than, say, eventually being made head of HUD of the FHA.”
Elizabeth Warren explains her problem with Congress’ response to protecting the American people during a radio interview in June 2010 with host Tom Ashbrook of On Point:
I got nothing when I walk into the room. You have to understand this. I don’t walk in with any votes, I don’t have any money to give. I just want to talk to people about what’s going on. And I think the part that is the hardest is sometimes I will talk to people in Congress – look, I think most of them, they didn’t go to Congress in order to lie, cheat, and steal. I think most of them went because they had some sense somewhere in their hearts at some point about public service. And I talk about what happens to middle class families and I watch faces, I watch eyes, connect on this, that say, “Yeah, I go back home, too.” And they name towns across America. And they say, “People are scared, people are worried, people are out of work. These are the things I hear in the grocery store, these are things I hear in the town hall meetings.”
TOM ASHBROOK: So what’s the counterweight then?
ELIZABETH WARREN: And then I say, “OK, look, here are three things we can do. But it’s about reining in an incredibly powerful industry. It’s about reining in a group that gives money and knows how to exercise power in Washington.” And I just watch the light go out, because it’s not going to happen.
Elizabeth Warren wants to protect the people. But it’s the Bankers, not Ms. Warren or the American people, that have the money and the power to keep the lights on for Congress and President. So Congress knows who they need to be protecting. And its not the people. Or Ms. Warren.
But why Barney Frank for the Director of the consumer financial protection bureau?
From Alain Sherter’s at BNet – Is Barney Frank After Elizabeth Warren’s Job Even Before She Has It?:
Frank, a fixture on Capitol Hill, knows how to cut deals with big business, as he showed in helping lead the fight over financial reform. It’s no accident that his leading financial contributor over his career is the American Bankers Association, followed by JPMorgan Chase (JPM).
So what are the odds of the Bankers getting what the Bankers want?