If Liz Warren Gets the Nod, She'll Have Osama bin Laden to Thank

Last Updated May 4, 2011 10:33 AM EDT


Elizabeth Warren is like Rocky -- she refuses to get knocked out. Against all odds, she helped win the fight to create an agency to protect consumers from financial abuse. Now chances are growing that President Obama will nominate her to lead the regulator, called the Consumer Financial Protection Bureau, despite continued objections from Wall Street.
Adriaaaan! The Harvard professor would still be a long-shot for confirmation in the Senate, of course. But it's getting dangerous to count her out. Even the American Bankers Association, one of the bureau's most virulent critics, appears to be hedging its bets. ABA president Frank Keating on Tuesday told reporters today that his organization would be "fully supportive" of Warren if she is nominated to serve as the bureau's first director. Then he backed away from that apparent endorsement, saying later that the trade group would support her only if she were confirmed by the Senate.

Yet Keating also acknowledged that Obama is increasingly likely to nominate Warren as the CFPB's first director. She had seemed out of the running for the slot after the White House in September made her a special adviser in charge of setting up the bureau. Why the turnaround? The President's soaring poll numbers following the death of Osama bin Laden.
"If she is going to be nominated, it's as a result of the events of the last several days," Keating said in response to a question. "The president is really riding high right now, and he may decide that it's worth it."
Appointing Warren: Win-win for the White House
Only nine weeks remain for Obama to put forward a candidate to lead the CFPB before it formally opens on July 21. In some ways, he can't lose by nominating Warren for the post. If Senate Republicans block her path, as they have threatened, Obama can blame the GOP for obstructing financial reform by thwarting the appointment of someone even her critics agree is supremely qualified for the position.

If a miracle happens and Republicans relent, then the White House has its woman. Alternatively, Obama could simply give her the job while Congress is adjourned for the July 4 break. But under such a "recess appointment," a favorite tactic under former President George W. Bush, Warren could serve as director of the CFPB only through 2012. That would give her a relatively small time frame in which to get the bureau up to speed.

Wall Street in fear
Either way, there's a growing feeling among financial industry types that Warren will get the nomination. Camden Fine, head of the Independent Community Bankers of America, said this week that it's better than 50-50 that Obama will back the long-time consumer advocate to lead the CFPB;
"I think the president is going to feel like he needs to give her a shot," said Mr. Fine said in an interview at a conference held by his trade group in Washington. He told a crowd of around 1,000 bankers gathered to lobby on Capitol Hill this week that he expects the nomination to come within two weeks.
Yet Fine, who before Congress passed the Dodd-Frank Act in 2010 had joined other financial lobbyists in trying to stymie the bureau's creation, also said big banks would continue to oppose Warren:
"There is no doubt that Wall Street is terrified of her," he said. "She really is the spawn of Satan to them--. they will come out against her with a vengeance."
Wall Street in terror? Can't get a better endorsement than that.

Image from Wikimedia Commons, CC 2.0
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  • Alain Sherter On Twitter»

    Alain Sherter is an award-winning business journalist who has written for The Deal, MarketWatch and Thomson Financial Media.

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