Elizabeth Warren, Wall Street critic, to head new consumer protection bureau
Elizabeth Warren is tipped to be appointed by President Obama to set up a new consumer finance protection agency dealing with mortgages, credit cards and other financial products. But the choice of Elizabeth Warren, a Harvard professor, is controversial.
WASHINGTON — President Barack Obama will appoint Wall Street critic Elizabeth Warren as a special adviser to oversee the creation of a new consumer finance protection bureau, a Democratic official said Wednesday.
Warren would report to both the Treasury Department and the White House in a role that would not require Senate confirmation. The 61-year-old Harvard University professor and consumer advocate had been considered the leading candidate to head the bureau itself, but her lack of support in the financial community could have set the stage for contentious Senate hearings that might ultimately have derailed her confirmation.
The official spoke on condition of anonymity ahead of a formal announcement.
The White House would not confirm the appointment, but Obama spokesman Robert Gibbs said an announcement could be made this week.
While Obama has long been a friend and supporter of Warren, he was keenly aware of the potential pitfalls of nominating a polarizing figure in the midst of a heated election year.
"I am concerned about all Senate nominations these days," Obama said during a news conference last week. "I've got people who have been waiting for six months to get confirmed who nobody has an official objection to."
The consumer bureau was created under the financial regulatory bill Obama signed into law earlier this year. It will have vast powers to enforce regulations covering mortgages, credit cards and other financial products, and be financed by the Federal Reserve.
The new bureau would consolidate consumer protection duties now spread across various regulatory agencies. The financial regulation law gives the Treasury Department the authority to run the consumer protection bureau while the nomination of its director is pending.
The law also says the Treasury secretary must transfer those functions to the new bureau within a year, but gives him latitude to seek an additional six months to complete the creation of the agency. That means Warren could, potentially, perform her new duties into 2012.
"I very much would like to see her directing that agency. Exactly in what form is less important to me than that she does it," Democratic Rep. Barney Frank, chairman of the House of Representatives Financial Services Committee, told The Associated Press on Wednesday. "If someone told me that a candidate for that job could be easily confirmed, I think that would be a disqualification."
But some in the business community condemned the move to skirt the Senate.
"The administration has circumvented one of the very few checks on a big new agency that already has been given an unprecedented concentration of regulatory powers," said David Hirschmann, head of the U.S. Chamber of Commerce's center for capital markets competitiveness. "This maneuver is an affront to the pledge of transparency and consumer protection that's purported to be the focus of this new agency."
Warren has served as head of the Congressional Oversight Panel, charged with monitoring Treasury's handling of the $700 billion bank rescue fund known as the Troubled Asset Relief Program. She has at times clashed with Treasury over her committee's findings and conclusions about the use of TARP money.
As of Sept. 10, however, Warren stepped back from working on the group's latest report, a signal that the new Treasury post was a possibility.
Her pending appointment was first reported by ABC News.
It was unclear whether Obama also intends to nominate a permanent director for the job this week.
Others mentioned as contenders to lead the agency are Michael Barr, an assistant treasury secretary who was a key architect of the administration's financial regulatory plans, and Eugene Kimmelman, a deputy assistant attorney general in the Justice Department's antitrust division.
Associated Press writers Jim Kuhnhenn and Daniel Wagner contributed to this report.