With less than 30 days to go before July 21st – the Designated Transfer Date and the day on which the Bureau will inherit much of its considerable power - the Bureau remains the center of substantial controversy. Here is the latest:
INSIDE THE BUREAU
Elizabeth Warren, Harvard professor, Bureau transition team lead, and oft-cited front-running Obama appointee to be the Bureau’s first director, said last week that “We really are an agency. We’re not an implementation team anymore. We’re there.”
President Obama faces growing pressure to appoint Elizabeth Warren to head the Bureau of Consumer Financial Protection, but even some Senate Democrats are wary of her nomination and Senator Dodd has already warned that she may not have the 60 votes required to avoid a filibuster on her nomination.
The White House, however, may be able to pick up Republican Senators Scott Brown of Massachusetts, Susan Collins and Olympia Snowe of Maine, and Chuck Grassley of Iowa in support of Ms. Warren. As Noam Scheiber of The New Republic reports, the banks may not even oppose Ms. Warren if she becomes the nominee:
for the moment, what’s interesting is the banks’ silence. Three industry officials I spoke with took care to assure me that their organizations aren’t actively opposing Warren. One defied me to find someone in the industry who was. Another reflected that, from the banks’ perspective, Warren might actually be preferable to Michael Barr, an assistant Treasury secretary who is also a leading candidate for the position.
Further complicating the matter is the upcoming midterm elections. New York Times columnist Paul Krugman wrote in his blog today that President Obama’s failure to nominate Ms. Warren may have significant repercussions for the upcoming midterm elections:
Leave aside the merits of appointing Warren, which are considerable, and think about the politics. At this point, not appointing Warren would be seen by the base as a slap in the face, and would seriously dampen enthusiasm going into the midterms. And Democrats need every bit of enthusiasm they can muster to avoid a Republican takeover of the House.
Not surprisingly, the White House is taking its time and no selection appears imminent at this time.
The Washington Post‘s financial journalists David Cho and Brady Dennis recently published, "Obama may compromise on consumer agency to pass financial regulation," which reveals that the Obama administration is no longer insisting on an independent Consumer Financial Protection Agency (CFPA). The Administration is concerned about quickly passing the bill through Congress:
President Obama’s economic team is now open to housing the consumer regulator inside another agency, such as the Treasury Department, though they still prefer a stand-alone agency. In either case, they are insisting on a regulator with political autonomy and real teeth so it can effectively enforce rules designed to protect consumers of mortgages, credit cards and other financial products.
Treasury Timothy Geithner met with Senators Dodd and Corker Wednesday night to discuss a possible compromise on financial regulatory reform:
In one scenario under discussion, a consumer bureau would be set up within the Treasury Department. In another, a consumer protection division would be established inside a new national agency to regulate banks.
Meanwhile, Elizabeth Warren has not conceded defeat. She appeared on Real Time with Bill Maher last Friday to advocate for financial reform.
Elizabeth Warren, head of the TARP oversight panel and strong advocate of the proposed Consumer Financial Protection Agency, will be appearing on the Daily Show tonight. The show’s website states: ”Congress’ chief economic watchdog talks about her work overseeing the bank bailout.” Check back tomorrow for details on her appearance.