Elizabeth Warren, Harvard Professor and consumer advocate, has been the leading candidate to run the new Consumer Financial Protection Bureau. It was, in fact, Warren’s idea to create such an agency in the first place.
Ms. Warren first came to our attention in the 2006 documentary Maxed Out, which was a film that showed the severe consumer debt crisis in America and how banks and lenders took advantage of borrowers, essentially indebtingÂ them for life. Warren knew then that the outcome of the consumer debt bubble would leave to crisis.
Warren is current the chairwoman of the Congressional oversight panel that oversees the distribution of TARP funds, essentially the watchdog of the US Treasury Department headed by Mr. Timothy Geithner.
Here is a brief exchange between the two at a Congressional hearing:
This was just one of many exchanges, and Secretary Geithner looks none to happy about being called out on how TARP funds were distributed to companies and banks.
According to the Huffington Post, Geithner is none to pleased about the possibility of Warren heading the new CFPB:
Treasury Secretary Timothy Geithner has expressed opposition to the possible nomination of Elizabeth Warren to head the Consumer Financial Protection Bureau, according to a source with knowledge of Geithner’s views.
The financial reform bill passed by the Senate on Thursday mandates the creation of a new federal entity charged with protecting consumers from predatory lenders.
Yet while her work on behalf of a federal unit designed solely to protect borrowers from abusive lenders has been embraced by the administration, Warren’s role as a bailout watchdog led to strained relations with the agency her panel has taken to task with brutal reports every month since Obama took office: Geithner’s Treasury Department.
Warren’s persistent oversight is part of the reason for Geithner’s opposition, according to the source.
In addition, her increasing public profile could make it difficult for Geithner, who will oversee the unit until it’s transferred to the Federal Reserve. His role would involve trying to balance her advocacy on behalf of borrowers with the demands of the nation’s major financial institutions, his traditional constituency.
Geithner’s objections to Warren taking over that role also involve her views on Wall Street, sources say. The longtime professor believes the nation’s megabanks are Too Big To Fail and have been among the biggest abusive lenders in the country. Her toughness on giant banks is said to be a longtime source of tension with Geithner.
Warren has been on the forefront of warning not just the American people, but the Obama administration. She has direct access to the President’s advisers and we believe she’s not afraid to tell it like it is.
Warren on August 13, 2009:
â€œYouâ€™re going to have a commercial real estate collapse that is going to dwarf the sub prime problem….”
â€œExpect 50% and 60% Default Rates On Commercial Real Estate Mortgagesâ€
Warren on January 10, 2010:
â€œIt is simple. This is Americaâ€™s middle class. Weâ€™ve hacked at it, and chipped at it, and pulled on it for thirty years now. And now thereâ€™s no more to do. Either we fix this problem going forward or the game really is over.â€
Warren on March 8, 2010:
I am afraid. Iâ€™m afraid because of what I see in the real economy. Iâ€™m afraid because I donâ€™t see books that are clean – balance sheets that have been cleaned up. Iâ€™m afraid because in October of 2008 Secretary Paulson came to the American people and said the problem is toxic assets on the books of the banks, and theyâ€™re still there. Iâ€™m afraid because Secretary Paulson said thereâ€™s too much concentration in the banking industry and thereâ€™s even more concentration today than there was fifteen months agoâ€¦
We would have approved of Warren’s appointment anyway, but Geithner’s opposition makes us want Elizabeth Warren for the job that much more.
Regardless of what one may think of her politics (she’s reportedly a Democrat), regulatory oversight of the nation’s financial institutions should transcend party lines.
If there’s one thing we’ve learned about Elizabeth Warren in the last several years, it’s that she really does care about consumers. Because the agency being established is to protect not banks, but consumers from unfair lending practices, we second her nomination.