A coalition of consumer, labor and civil rights groups that fought for the creation of the Consumer Financial Protection Bureau said they could support someone other than Elizabeth Warren as director.
Warren, 61, the White House appointee assigned to set up the agency, is “one potential nominee” who understands both the financial services market and consumer protection, the coalition group, Americans for Financial Reform, wrote today in a progress report on the bureau. The group didn’t say who would be their top choice.
Warren was named in September by President Barack Obama as a special adviser to the Treasury secretary and assistant to the president. She is credited with originating the idea for the bureau, which became part of the Dodd-Frank regulatory overhaul.
Obama didn’t nominate her for director after Christopher Dodd, a Connecticut Democrat who then headed the U.S. Senate Banking Committee, said Warren couldn’t get the 60 votes needed for confirmation.
Reid Cramer, director of the asset-building program at the Washington-based New America Foundation, said that pressure from the Democratic base to have Warren run the agency had eased since September.
Some people have realized that Warren might not be able to win Senate confirmation, while others now appreciate that any director will be using the blueprint that Warren has created thus far, he said.
“There is now less of this idea that without Elizabeth Warren, there would be a calamity,” Cramer said.
In the report, the groups called on Obama to nominate a director for the new agency “as soon as possible.”
“Based on the president’s track record, we have every reason to believe that he’s going to propose someone who is truly committed to protecting consumers,” Plunkett said.
The consumer bureau, a signature part of the Dodd-Frank overhaul that Obama signed in July, will regulate financial products from mortgages to payday loans. Companies from banking giants like JPMorgan Chase & Co. to smaller installment lenders like World Acceptance Corp. face new restrictions on their businesses.
White House spokesman Robert Gibbs said on Sept. 17 that Obama hoped to nominate a consumer bureau director “over the course of the next several months.” He didn’t rule out Warren as a candidate, and said she would help Obama find “new leadership” for the bureau. The White House didn’t immediately respond to requests for comment today.
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In late December, a top Warren adviser, Raj Date, began soliciting names from industry and consumer groups on who would be best-qualified to head the bureau. Plunkett said he presumes that the White House and the consumer bureau are “working in concert” to find that person.
“I assume that wouldn’t be happening unless the administration and the White House in particular wanted it to happen,” Plunkett said.
The Obama administration’s move in September to make Warren a special assistant achieved the twin goals of avoiding a Senate confirmation fight with Republicans, while also pleasing key Democratic supporters. Now, those goals may be in jeopardy again.
Republicans, now in control of the House of Representatives, have stepped up criticism of Warren’s position as a circumvention of the Senate’s constitutional right to confirm key appointees.
On Nov. 22, Republican U.S. Representatives Judy Biggert of Illinois and Spencer Bachus of Alabama, now chairman of the House Financial Services Committee, wrote in letters to the Treasury Department and the Federal Reserve that the Warren appointment “undermined one of the key checks and balances in our Constitution.”
In a letter this week in response to Biggert and Bachus, the inspectors general of the Treasury Department and the Federal Reserve said that without a Senate-confirmed director, the bureau wouldn’t be able to carry out key functions outlined in the Dodd-Frank law. In particular, they couldn’t begin to supervise or regulate non-bank firms, a high priority for community banks, the letter said.