When it first looked like Harvard Law professor Elizabeth Warren might stand a serious chance of getting appointed at the first director of the newly-created Consumer Financial Protection Bureau — a regulatory agency which she was the first to suggest — Senate Banking Committee Chairman Chris Dodd (D-CT) poo-pooed the notion, saying there’s a “serious question” about whether Warren is “confirmable.”
The New Republic’s Noam Scheiber wrote that “after surveying a dozen insiders over the last few days — congressional aides, industry officials, progressive activists, and a few administration officials — I’ve concluded that the odds are good that Warren would be confirmed if nominated by the White House.” And Dodd now seems to have shifted his rhetoric, saying that even if Warren is confirmable, it’s not worth a potential fight to get her the job:
What you don’t need to have is an eight-month battle for who the director or the head or chairperson of this new consumer financial protection bureau will be.
Dodd pretty clearly would prefer that current Federal Deposit Insurance Corp. Chair Shelia Bair receive the nod, but Bair has said that she’s not interested in the job. “I did some checking on Sheila Bair and I was going to have very little difficulty getting Sheila Bair confirmed,” said Dodd. “I’d probably confirm her in a couple of days. That’s how strongly people felt, Democrats and Republicans.”
Bair certainly has the credentials to do the job, as she was one of the first federal officials warning about the proliferation of subprime loans during the buildup of the housing bubble. But she’s doing very important work at the FDIC, and there’s simply no reason for passing over Warren.
As Paul Krugman wrote, “Warren really is a pioneering expert on household debt and financial distress, who has also shown an ability to work effectively in an official position.” The Boston Globe called her the “clear choice” for the CFPB job:
Warren, a Harvard Law School professor, has conducted extensive research on bankruptcy, predatory lending, and other consumer-finance issues. Throughout her tenure as head of a panel appointed by Congress to provide oversight of the federal bailout funds, Warren has sought to connect the machinations of the financial system with the struggles of average families. She raised early alarms about subprime mortgages, and her work casts light on how a deliberate obscurity in the terms of credit cards and mortgages contributed to an unsustainable growth of consumer debt.
Leaving aside Warren’s qualifications, it makes no sense to me that Dodd feels a political fight here isn’t worth it. Warren is an unabashed, articulate consumer advocate, and her nomination would set up a clear choice: consumers or the banks. After having overwhelmingly voted against the Dodd-Frank Wall Street reform bill, Republicans standing against her nomination would once again be siding with the financial services industry. I can’t see why we “don’t need” to show that dynamic at work.