Elizabeth Warren’s Consumer Financial Protection Bureau

We have written on several occasions about financial consumer advocate and Harvard Law Professor Elizabeth Warren. In several Massachusetts consumer blog articles, we encouraged her appointment as director of the newly established Federal Consumer Financial Protection Bureau.

After all, she designed the agency to protect consumers in financial issues, after the Great Recession and financial crisis/banking crisis/mortgage crisis, which began in 2008. She has been appointed as a “special advisor” on a “temporary” basis, to set up the CFPB, but not as director, on a longer-term basis. She has hired staff, set up a fraud alert hotline, and hosted conferences on credit cards and mortgages. She still has no official position, however, and the CFPB has yet to commence operations.
Nevertheless, we thought we’d revisit the CFPB, and Professor Warren, to see what progress, if any, has been undertaken. The agency becomes official on July 21, 2011, and has been running as a quasi-agency in the mean time. On the one hand, there is so much lobbying by the banking industry against such a strong consumer advocate that it may not allow the president to appoint Ms. Warren. There may not be sufficient votes to have the Senate confirm her.
On the other hand, however, Professor Warren is getting the CFPB set up and running, and she is advocating for consumers from a high perch. She has the support of smaller banks, however, when she proposed a $20 million fine on large mortgage banks for wrongful foreclosures, she hit a raw nerve with the big banks. Senators who are supported by the big banks and financial institutions oppose her. Those senators and the lobbyists for the big banks have begun to advocate for a “committee” to replace the “director” of the agency, which, in essence, would assure that nothing at all gets done.