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Warren Out as Head of Consumer Financial Protection Agency

Monday, July 18, 2011

Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer Show, Carter Dougherty, reporter for Bloomberg News, discusses President Obama's decision to pass on Elizabeth Warren's nomination as the head of the Consumer Financial Protection Bureau, in favor of Richard Cordray.

Elizabeth Warren is no longer in the running for the new oversight agency that she developed. President Obama chose Warren to create the Consumer Financial Protection Bureau (CFPB) last fall, but faced strident opposition from the GOP against formally nominating Warren to head the agency.

Instead the president has picked former Ohio Attorney General Richard Cordray, a move that Warren has publicly supported. Yet many on the left were dismayed by the president’s choice, as Warren is hailed as a champion of consumers against big banking. 

Carter Dougherty said that Warren’s appointment to set up the bureau last fall was viewed as an “unadulterated victory” for the Progressive wing of the Democratic Party.

They like her because she’s articulate, they like her because she is pushy, aggressive, and they like her because she connects as well with ordinary people.

He said despite her credentials as a Harvard professor, Warren brought a folksy sensibility to the job that made her popular with progressives.

The bureau is set to officially open on Thursday. Warren has steered the agency toward two priorities—simplifying mortgage paperwork and simplifying credit card paperwork. Both priorities are geared toward not only allowing consumers a better understanding of the contract that they are entering, but also allowing them to comparison shop for the best deals. Dougherty said while it’s likely the agency will continue in this direction, it will also have to deal with enforcement of the various consumer protection laws already in place.

The $64,000 question, so to speak, [is] exactly how effective it can be in changing the daily lives of Americans as it relates to finance.

Some other agencies charged with consumer protection that preceded the bureau, such as the Food and Drug Administration in the 1920s, may prove illustrative. The FDA successfully enforced that medicine labels must deliver on their claims, for example, but the process took some time.  While a consumer complaint hotline is going live this week, Dougherty thinks that more sweeping changes from the CFPB will likely also take time.  

Warren was actually the person who initially brought Cordray to the agency. She has strongly supported his nomination. Dougherty said Cordray is aggressive, like Warren, and has a track record of filing lawsuits against banks on behalf of the state’s pensioners and investors. Dougherty believes that Cordray will prove to be as tenacious and popular as his predecessor.

While Republicans strongly opposed Warren, they seem equally opposed to the agency as a whole. Dougherty said the debate is largely philosophical.

On one level it is about believing in consumer protection but simply debating exactly how you best accomplish this. A more skeptical soul—and you know journalists are paid to be skeptical—would say that this is simply a rehash of the debate that we had last year about whether you need a consumer financial protection bureau or not.

Guests:

Carter Dougherty

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Comments [5]

Jack Jackson from Central New Jersey

I'm expecting Ms. Warren to turn this into a good thing - by running for and taking Teddy Kennedy's Senate seat back from Scott Brown.

I'm on the bus to Massachusetts to campaign for her the day she announces.

Jul. 20 2011 09:02 AM

I don't think I've ever heard the word "pushy" applied to a man. I'm disappointed to hear it's still being used to describe a strong, courageous woman.

Jul. 19 2011 10:05 AM
Eugenia Renskoff from Brooklyn, NY

Hi, I think it will be a long time before the consumer gets respect. I am sorry that Elizabeth Warren won’t head the agency that was her baby. As a borrower deeply hurt by the housing crisis, I would have wanted someone like Elizabeth Warren to fight for me and people like me. Eugenia Renskoff

Jul. 18 2011 01:29 PM
kathleen Marcus from N.Y.10547

most in congress and the senate are millionaires. i want to know what each one has done personally to create jobs with their own money other than investing in the stock market to increase their funds.
i know what the president said he is willing to do.

Jul. 18 2011 12:27 PM
Tom from Upper West Side

How can we consumers expect any protections from the new agency, if Sen. Shelby and his fellow financial industry-funded senators are committed to blocking refors or expanded oversight?

Jul. 18 2011 10:39 AM

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