Advertisement

SKIP ADVERTISEMENT

An Agency Builder, but Not Yet Its Leader

WASHINGTON — It is conventional wisdom in this town that the first director of the new Consumer Financial Protection Bureau will be anyone but Elizabeth Warren.

She claims not to care. Ms. Warren, who pushed for the creation of the bureau, has waged a tireless campaign on its behalf. In doing so, she may have helped her own prospects for getting the job.

In nine months overseeing the bureau’s start-up, she has talked with community bankers in every state, conferred with about 70 members of Congress, conducted dozens of media interviews and met with more than 1,000 banking, business and consumer representatives. Preparing for the agency’s July 21 opening, she supervised the hiring of more than 300 people.

To nervous lenders, her message has been as simple and unadorned as her personal style: a new regulator to protect consumers from abusive financial products does not have to punish banks to do its job.

That message has won her grudging respect in banking circles. Daryll Lund, president of the Community Bankers of Wisconsin, expressed “cautious optimism” about both her and the bureau. “The things she is advocating for are things we support,” he said.

But it remains unclear whether she has changed enough minds. Senate Republicans want to replace the job of director with a commission and reorganize the agency before they will consider any nominee for confirmation.

Only President Obama can decide if Ms. Warren is his choice for director, and for months he has said nothing about it. Mr. Obama has said he has great respect for Ms. Warren and her advocacy for consumers, but he has appeared unwilling to wage a battle with the Senate to actually nominate her to direct the new bureau.

Instead, the administration and Democratic Party officials have floated stories suggesting that Ms. Warren might run for the United States Senate in Massachusetts, where she teaches law at Harvard. Another trial balloon raised the possibility that the president would nominate one of Ms. Warren’s deputies.

Image
President Obama has yet to say whether he will nominate Elizabeth Warren to head the Consumer Financial Protection Bureau.Credit...Michael Reynolds/European Pressphoto Agency

People outside the agency who speak often with Ms. Warren say they believe she still wants the job. Ms. Warren declined to be interviewed on the record about the issue. In a statement issued through a spokeswoman, she said: “What matters to me is having a strong consumer agency that works for American families.”

Consumer advocates have orchestrated support for her. Other potential nominees have backed away from the job in deference to Ms. Warren. Congressional Democrats have urged Mr. Obama to appoint her while Congress is in recess, something her opponents on Capitol Hill are determined to block.

But with no clear signal as to who will run the bureau, many bankers are now worrying that the opposition to Ms. Warren may produce a leaderless consumer bureau.

Without a director, the agency cannot regulate nonbank financial companies, including payday lenders, mortgage companies and consumer credit agencies. Those businesses compete directly with local banks, and bankers do not like the idea that their institutions will be regulated by the bureau while their chief competitors will not.

“Frankly, I’m flabbergasted as to why the administration has not nominated somebody to head up this very important agency that they created,” said Richard Hunt, president of the Consumer Bankers Association.

Mr. Obama “is considering a number of candidates for the position of director, but no decisions have been made, and we will not comment on speculation about potential candidates before the president nominates someone,” said Amy Brundage, a White House spokeswoman. She added that the president would also oppose any proposals “that weaken the agency and hurt American consumers.”

Administration officials point out that if Ms. Warren had been nominated as the director last September instead of being appointed as an assistant to the president and a special adviser to the Treasury secretary, she could not have worked on the bureau’s start-up until she was confirmed by the Senate — which looked unlikely last year.

That would have left the person who came up with the idea for the bureau unable to talk about it for months.

Ms. Warren, a driven, sometimes blunt 62-year-old grandmother, made her way from Norman, Okla., to a professorship at Harvard Law School. She arrived in Washington three years ago to head a Congressional panel overseeing the Troubled Asset Relief Program, the $700 billion aid package for banks. She quickly won applause for her aggressive questioning of the Treasury secretary, Timothy F. Geithner, and other officials.

Image
In nine months overseeing the bureau's start-up, Elizabeth Warren has made inroads with some of her critics.Credit...Jonathan Ernst/Reuters

She campaigned in 2009 and 2010 for the consumer bureau’s inclusion in the Dodd-Frank financial bill, once saying to the irritation of her opponents that either Congress would produce a strong consumer agency or there would be “no agency at all and plenty of blood and teeth left on the floor.”

“She’s often been quoted as attacking big banks as the source of problems,” said Steve Bartlett, the president of the Financial Services Roundtable, which represents many of the largest banks. “I don’t agree with that approach to life.” But, he added, “it’s been 10 months, and I think this town is kind of looking to move on to get a director.”

Surprisingly wispy in person, with a bob of hair that she often tucks behind her ears, Ms. Warren cannot converse without generating energy. She often waves her hands as she speaks, gesturing as if holding a book, or outlining an envelope with her fingers, all the while leaning forward intensely in her chair. At any moment, it seems that she could lose her balance and fall from her perch.

“If you look at what she’s done and what she’s said, she is much less scary than she has been portrayed,” said Kathleen Keest, senior policy counsel for the Center for Responsible Lending, a consumer protection group. “She’s actually been more successful at winning people over than her opponents had hoped. I think that’s why they’ve changed their arguments to demanding a fundamental restructuring of the agency.”

Ms. Warren has met at least once with the chief executives of nearly all of the country’s largest banks, and some of them have had positive things to say about the bureau, if not about Ms. Warren personally.

“We fully acknowledge that there were many good reasons that led to the creation of the C.F.P.B.,” wrote Jamie Dimon, the chairman of JPMorgan Chase, in his annual shareholders letter, “and believe that if the C.F.P.B. does its job well, the agency will benefit American consumers and the system.”

Usually, Ms. Warren’s day includes more than a dozen appointments and meetings mixed in with 15-minute calls to bankers or administration officials.

Scott E. Latham, president of the Community Bankers Association of Alabama, got one of those calls. “She brought banking down to a personal level, talking about the relationship her father had with the local banker and her impressions of going into the bank when she was young,” he said.

“She made a clear case that she was brought up outside the Beltway, and that she understood the plight of everyday Americans,” Mr. Latham said. Though he still has doubts about the agency, “it gave me confidence that if in fact she is the one who leads the agency, it will have a good understanding of our needs.”

A version of this article appears in print on  , Section B, Page 1 of the New York edition with the headline: An Agency Builder, But Not Yet Its Leader. Order Reprints | Today’s Paper | Subscribe

Advertisement

SKIP ADVERTISEMENT