President Barack Obama has chosen a candidate other than Elizabeth Warren as director of the new Consumer Financial Protection Bureau, according to a person briefed on the matter.
The president’s choice is a person who already works at the consumer agency, the person said yesterday. Obama may make the nomination as soon as next week, another person briefed on the administration’s plans said.
The people, who spoke on condition of anonymity because the process isn’t public, didn’t name Obama’s choice.
Elizabeth Warren, a Harvard professor, was appointed last fall by Obama to set up the consumer bureau until a director was named. Warren previously was head of the congressional watchdog panel overseeing the bank bailout.
Raj Date, a top deputy to Warren at the consumer bureau, was on a short list of candidates to become director, Bloomberg News reported last month, citing a person briefed on the process. Date, currently the bureau’s associate director for research, markets and regulations, is a former banker with Deutsche Bank AG and Capital One Financial Corp.
Consumer bureau spokeswoman Jen Howard declined to comment, as did Jen Psaki, a White House spokeswoman.
The consumer bureau, which is to begin formal operations on July 21, was established by the 2010 Dodd-Frank financial-regulatory overhaul to fill what lawmakers said was a gap in oversight of financial products such as mortgages and credit cards whose abuse contributed to the 2008 credit crisis.
The bureau’s director requires confirmation by the Senate. After 44 Republican senators announced in May that they wouldn’t vote to approve any candidate to run the bureau without changes in its structure, analysts said the White House might have to resort to a temporary appointment during a congressional recess. Sixty of the 100 senators are required to vote for a nomination because of procedural rules.
The legislation requires a director confirmed by the Senate or appointed in recess before the bureau has authority to supervise and regulate non-bank financial firms such as mortgage originators, payday lenders and credit bureaus. It also isn’t able to enforce rules against “abusive” consumer products, a legal standard Congress created in Dodd-Frank.
Obama didn’t nominate Warren last fall after then-Senator Christopher Dodd, a Connecticut Democrat who headed the Banking Committee, said she couldn’t win confirmation.
Since then, several potential candidates have rejected overtures, including Jennifer Granholm, the former governor of Michigan, and Ted Kaufman, a former Democratic senator from Delaware, people briefed on the search said.
Clash With Republicans
Warren has clashed with House Republicans repeatedly about the agency’s mandate and about her role in settlement talks between banks, state and federal agencies over problems with the foreclosure process. One hearing, on May 24, turned into a dispute about scheduling during which Representative Patrick McHenry, a North Carolina Republican on the House Oversight and Government Reform Committee, accused Warren of lying.
Date earned an engineering degree from the University of California at Berkeley and a law degree from Harvard University. He was senior vice president for corporate strategy and development at Capital One and a managing director in the financial institutions group at Deutsche Bank. During the debate over Dodd-Frank, Date headed the Cambridge Winter Center for Financial Institutions Policy, a research group he founded.
When she appointed Date to the unit that will draft rules for credit cards, mortgages, student loans and payday lenders, Warren said that he and his team would “bring a wealth of experience in the financial services industry, government, non-profits, community banking and academia that will help us build a world-class” research and regulations unit.
In an interview earlier this year with Bloomberg News, Date, who joined Capital One in 2001, recalled his tenure there during the housing bubble. He said he told his colleagues that schemes to make quick money off customers would have affect the bank’s reputation and balance sheet.
“I was very, very boring at cocktail parties,” Date said in the interview. “But I happened to have experience at the intersection of issues that were uniquely important in the fall of 2008.”