Elizabeth Warren Tapped as Consumer Protector

Updated at 7:18 p.m. ET

President Obama will appoint Wall Street critic Elizabeth Warren as a special adviser to oversee the creation of a new consumer protection bureau, a Democratic official said Wednesday.

CBS News confirmed that Mr. Obama will appoint Warren to a dual role reporting to him and Treasury Secretary Timothy Geithner. Warren's appointment is expected to happen this week.

This appointment should allow the White House to avoid putting Warren through a likely tough Senate confirmation process.

The 61-year-old Harvard University professor 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 may have ultimately derailed her confirmation.

The official spoke on the condition of anonymity in order to speak ahead of the formal announcement.

White House officials would not confirm the appointment.

The independent consumer bureau was created under the financial regulatory bill Mr. 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 the 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.

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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 removed herself from the panel's work, a signal that the new Treasury post was a possibility.

Her pending appointment was first reported by ABC News.

The financial regulation law gives Treasury the authority to run the consumer protection bureau while the nomination of its director is pending.

It was unclear whether Mr. 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.

Oregon's Democratic Sen. Jeff Merkley, a member of the banking committee, praised Warren's pending appointment, but said he hopes Obama ultimately will nominate her as the consumer bureau's permanent director.

"She is more than deserving of the job and the Senate should have the opportunity to confirm one of the nation's strongest consumer advocates," Merkley said in a statement Wednesday.