Buzz on Friday had Rep. Melissa Bean (D-Ill.) possibly getting tapped as the first Consumer Financial Protection Bureau head depending on the outcome of her too-close-to-call reelection race, in which Republican Joe Walsh maintained a slight lead as of Sunday afternoon. But a possible Bean nomination is not sitting well with reformers on the left who say the moderate Illinois congresswoman is far too close to the banking industry. Said one administration official: “It’s not clear she would be acceptable to the reformers.”
The current head of the CFPB, Harvard Law Professor Elizabeth Warren, is technically a special adviser to the President, so the agency will need an official director when it stands on its own in July 2011. (At the moment, it is still considered part of the Treasury Department.) Politico doesn’t source its report, so let’s take this with a grain of salt, but going from Warren, a staunch consumer advocate who has been taking on Wall Street for years, to Bean, a bank-friendly Democrat who actively tried to gut consumer protection provisions from the Dodd-Frank bill passed last year, would be a terrible shift.
Bean is one of the leaders of the New Democrats, a group of House Democrats who have cozied up to Big Business and Wall Street, turning them into a fundraising powerhouse, as described by ProPublica. Bean — a member of the House Financial Services Committee — has raised $2.5 million for her own campaigns from the finance industry, and that sector was far and away her largest contributor in 2010.
Bean’s main contribution to the financial reform debate was attempting to water down a key provision of the Dodd-Frank legislation, and give banks more leeway to take advantage of consumers. Under Dodd-Frank, states are allowed to enact consumer protection laws above and beyond those set at the federal level, giving their citizens additional protections if they see fit. A provision that Bean proposed would have exempted national banks from these enhanced standards, giving states no incentive to enact stronger protections, lest they disadvantage their own community banks.
Bean’s push for federal preemption shows that she is far more concerned with the ability of banks to make profits than she is with protecting consumers from bank excess. While she was at it, she helped the New Democrats try to blow derivatives regulation full of holes, gutted a bill aimed at limiting bonuses at banks that took TARP money, and had her chief of staff depart for the Chamber of Commerce, where he lobbied against financial reform. That’s not the record a director of the only federal agency explicitly tasked with protecting consumers should have.