Yes, you read that right. Apparently some GOPers are rethinking their vehement opposition to Harvard law professor and bailout watchdog Elizabeth Warren running the new Bureau of Consumer Financial Protection. A short item in the Wall Street Journal‘s gossipy “Heard on the Street” column today says there are whispers that “some Republicans are warming to Ms. Warren as the first consumer financial-affairs regulator over another candidate, Treasury Department Assistant Secretary Michael Barr. The thinking: Ms. Warren isn’t shy about speaking her mind, so banks would know what was coming.” Whereas Barr, the Journal says, might be more likely to spring big regulatory surprises on the banks, something no banker—or Republican, presumably—wants.
In one regard, the GOP is right: Warren is clear and plain-spoken in her defense of consumers and their rights. (Read David Corn’s profile of Warren for more on that.) The consumer bureau, you’ll remember, is largely her idea, based on a 2007 article she penned in the journal Democracy calling for a new “Financial Product Safety Commission.” That commission would regulate mortgages, say, much like the existing Consumer Product Safety Commission regulates toasters.
As I reported last month, there’s also been considerable opposition in the banking sector to Warren leading the new, independent consumer bureau, which will be housed in the Federal Reserve. Multiple state banking association chiefs have lobbied Congress against her potential nomination. Those same chiefs suggested that the American Bankers Association, the top banking trade association, didn’t want her to run the bureau, either.
Here’s my quibble with the Journal‘s optimistic report: Unlike the anonymous GOPers the Journal refers to, the bankers I interviewed who oppose Warren, on the record, aren’t about to warm to her because she’s outspoken. They oppose her because they think she doesn’t understand the realities of running small community banks, the type sure to be impacted by the new consumer agency. Warren just doesn’t get it, these chiefs claim. (Warren, I’m sure, would disagree.)
Sure, it’s somewhat heartening for Warren supporters to hear Republicans might yet support her nomination. But don’t believe for a minute that her path to running the bureau is now wide open.