President Obama is facing a major lobbying battle over whether to appoint Elizabeth Warren as the first head of the Bureau of Consumer Financial Protection just a day before he will sign the financial regulatory revamp that will establish the agency.
The president's pending decision is quickly overshadowing the achievement of passing the overhaul of the nation's banking system that Obama will sign on Wednesday, which the administration wants to use as a signal it is stabilizing a shaky economy.
On one side are liberals who are advocating that the Harvard University law professor, who first proposed such an agency three years ago, be picked as director overseeing rules for home mortgages, credit cards, payday loans and other products. They are lobbying the administration to go bold and pick Warren, a darling of the liberal base that Democrats need in midterm elections.
"Warren has shown a steadfast and tireless commitment to protecting consumers throughout her distinguished career and is without question the best candidate to run the new CFPB," said Heather Booth, executive director of Americans for Financial Reform, the labor and consumer activist coalition that helped spearhead passage. Obama is expected to name the bureau director soon, given it is under deadlines to issue rules and ramp up operation.
But Warren's pick would likely trigger opposition from industry and Republicans, though it is uncertain if it would be strong enough to stop her nomination. Senate Banking Chairman Christopher Dodd raised doubts Monday that Warren could be confirmed by the Senate. Dodd made his comments on "The Diane Rehm Show" on Washington radio station WAMU. Asked about Warren, who chairs the Congressional Oversight Panel for the Troubled Asset Relief Program, Dodd said that "no idea is terribly creative if it can't sell," and he asked rhetorically about Warren, "Is she confirmable?"
Warren has been an outspoken critic of some of the Obama administration decisions on bailouts, tangling with Treasury Secretary Geithner, among others, in public hearings. Treasury is denying any friction between Warren and Geithner.
"Given her strong leadership on consumer protection, Secretary Geithner believes that Elizabeth Warren is exceptionally well-qualified to lead the new bureau, and, ultimately, that's a decision the president will have to make," said Treasury spokesman Andrew Williams.
Warren also has been a target for Republicans, who warn the bureau will go too far in imposing onerous regulations on business.
"It's premature to assess," said Sen. Judd Gregg, R-N.H., over whether a Warren pick would meet strident GOP opposition. "I can't think of a more important appointment, other than chairman of the Fed, that's more important from a regulatory standpoint than this one because of the significant independence this person has."
Sen. Bob Corker, R-Tenn., cautioned Obama against "naming an activist to this position" because it "would be a very dangerous, worst-case scenario for our country."
To help buoy her candidacy, Sen. Tom Harkin, D-Iowa, is drafting a letter to call on Obama to nominate a consumer advocate like Warren to head the bureau.
Industry privately grumbles that Warren would be their least favorite candidate to head the agency. Other prospective nominees, including Assistant Treasury Secretary Michael Barr, would be much less popular than Warren with liberal Democrats, but they are holding their fire to see who Obama nominates. Industry leaders appear uncertain on whether she could get confirmed.
According to one source's note during a March 23 lobbyist conference call on the bill, some thought Warren could get quickly confirmed. But another source on the call said the certainty wasn't shared by others and that industry doesn't have a good take on the vote count.
"She could get confirmed, but I think it would be tough," said the industry lobbyist. "There are a lot of people on the Senate side who don't like her."
This article appears in the July 24, 2010, edition of NJ Daily.