Suggested Reading: The Travails of Ms. Warren
Joe Nocera tells the story of the politicization of Elizabeth Warren and the emergence of the Consumer Financial Protection Bureau:
It’s finally live.
The Consumer Financial Protection Bureau, I mean. After 10 months of preparation — hiring staff, creating a management structure, laying out an initial agenda — the bureau officially hit the starting gate on Thursday, a year to the day after the Dodd-Frank financial reform bill was signed into law by President Obama. And, of course, the person who hired most of that staff, created that management structure and laid out that agenda — indeed, the person most responsible for the bureau’s very existence — is departing. This coming week will be Elizabeth Warren’s last at the bureau. So accustomed are we to our nation’s poisoned politics that nobody even thinks this is strange.
“In a world in which the Republicans would have let me have the job, yeah, I would have been glad to have stayed,” she told me earlier this week when I asked if she was disappointed that President Obama had decided, in the end, to nominate Richard Cordray, the former attorney general of Ohio, to be the bureau’s first director. (Cordray was already on the premises; Warren had recruited him to be the bureau’s chief enforcement officer.) “But they made it so clear that was never going to happen.”
Led by Senator Richard Shelby of Alabama — whose descent from respected member of the Senate Banking Committee to partisan political hack has been truly stunning — Senate Republicans had vowed to block Warren from ever being able to run the agency she brought to life.
Still, she is pleased that the president chose Cordray: “Rich will be better than good. He’s smart, and he’s tough. And he probably understands the politics better than I do.”
Naturally, Shelby et al. have now promised to block him as well — ostensibly because the bureau requires “structural changes” to make it more “transparent.” In fact, the only thing that’s transparent is the absurdity of this fig leaf. What the Republicans are trying to do is cripple the new consumer agency before it ever gets the chance to, you know, help consumers. Bankers are their constituency, not consumers.
What has long been striking to anyone following Warren’s travails these past 10 months — ever since the president asked her to set up the bureau — is the disparity between what she’s actually done versus the Republican demonization of her. It is true that as a Harvard law professor, where she raised hell about the “tricks and traps” too often used by the financial services industry to gouge its customers, she used strong, colorful language. It is easy to see why she might make some bankers nervous.
But in setting the new bureau’s priorities, she has mostly stressed the importance of clear disclosure and easy-to-read contracts — so that consumers will be able to understand what they are agreeing to. (It certainly might have helped subprime borrowers avoid a lot of pain had such an agency been in existence during the bubble years.)