Warren named Consumer Financial Protection Bureau czar
by AccountingWEB on
Is Harvard Law Professor Elizabeth Warren a pioneer of consumer financial protection issues or is she too critical of Wall Street and the banking industry?
Americans will have to find out while she is on the job.
President Barack Obama last week appointed Warren to serve as Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau, an agency created by the Wall Street Reform and Consumer Protection Act signed by the president in July.
“Professor Warren has been a pioneer on the issues before the Consumer Financial Protection Bureau, and she will now help lead the effort to stand up the agency," said Treasury Secretary Timothy Geithner following Warren's appointment.
The newly created agency, according to Obama, will serve as a watchdog for consumers by enforcing what he called the "toughest financial protections in history."
“The Consumer Financial Protection Bureau will crack down on the abusive practices of unscrupulous mortgage lenders, reinforce the new credit card law we passed banning unfair rate hikes, and ensure that folks aren’t unwittingly caught by overdraft fees when they sign up for a checking account," Obama added.
The president, however, has been accused of circumventing Senate confirmation of Warren by appointing her as an adviser rather than as the bureau's director.
When Sen. Bob Corker (R-TN) heard reports that Obama intended to appoint an interim head of the Consumer Financial Protection Bureau, he urged the president to reconsider in a letter dated September 15:
"This particular position, one that was created just months ago, is unprecedented in the nature of its unfettered and unchecked authorities, which makes the confirmation process even more important to the interests of the American people. The individual who heads this bureau will be able to make rules, with ultimately no checks and balances, that could have broad reaching implications for the U.S. economy as it relates to accessing credit, social justice, and the safety and soundness of the U.S. banking system. The job is disproportionately reliant on the decisions of one individual with access to large sums of taxpayer monies to carry out the agency agenda. Taxpayers deserve better stewardship in the determination of who will take on this responsibility."
Sen. Christopher Dodd (D-CT) also appeared concerned by the president's decision.
"They still need to have a nominee," Dodd said in a Los Angeles Times report. "We need a director and we need someone that's confirmable, and anything short of that, you're going to put this bureau in some jeopardy."
Geithner is given interim authority of the bureau until a director is confirmed, according to the financial reform legislation.
Elizabeth Warren biography:
- Served as the Leo Gottlieb Professor of Law at Harvard University.
- Former chief adviser to the National Bankruptcy Review Commission, and she was appointed by Chief Justice Rehnquist as the first academic member of the Federal Judicial Education Committee.
- Served as a member of the Commission on Economic Inclusion established by the FDIC.
- Served as vice president of the American Law Institute and she has been elected to membership in the American Academic of Arts and Sciences.
- Written nine books, and more than a hundred scholarly articles dealing with credit and economic stress. Her two latest books, The Two-Income Trap and All Your Worth, were both on national best seller lists.
- Principal investigator on empirical studies funded by the National Science Foundation, the Ford Foundation, and more than a dozen other foundations.
- Testified several times before House and the Senate committees on financial issues.
- Time magazine has twice named her one of the Time 100 Most Influential People in the World, the Globe named her Bostonian of the Year, and the National Law Journal named her one of the Most Influential Lawyers of the Decade. She has been recognized for her work by several other publications and professional groups, including Forbes, GQ, and Smart Money.