Wall Street critic Elizabeth Warren said Friday she accepted the job of setting up a consumer financial protection agency for U.S. President Barack Obama and declared that the time for financial “tricks and traps” was over.
Obama was expected to announce his appointment of Warren, a Harvard University professor and hero to liberal activists, at 1:30 pm EDT, taking a step forward in enacting the financial reform that is a signature achievement of his presidency.
The Consumer Financial Protection Bureau, which is Warren’s brainchild, will have broad powers to write and enforce regulations covering mortgages, credit cards and other financial products.
Warren is reviled by many on Wall Street for her calls to crack down on abusive lending practices by financial firms.
Warren will not be in charge of directing the agency once it is formally set up. By selecting her as an adviser rather than as the agency head, Obama sidestepped the congressional confirmation process, which Republicans could have used to thwart Warren’s nomination.
Warren said in a blog post on the White House website that she had “enthusiastically agreed” to take on the role.
“The president and I are committed to the same vision on CFPB and I am confident that I will have the tools I need to get the job done,” she said.
“The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market. The time for hiding tricks and traps in the fine print is over.”
The White House hopes Warren’s appointment will energize supporters from the president’s liberal base ahead of Nov. 2 elections across the nation that are expected to produce victories and possibly congressional majorities for Republicans.
She will become assistant to the president and special advisor to Treasury Secretary Timothy Geithner.
“Warren will play the lead role in setting up the bureau and ensuring it is as effective as possible,” a White House official said. “(She) will also advise the president on policies and programs that are designed to protect the financial interests of middle-class families.”
ENLARGING THE FINE PRINT
Obama, a Democrat, will use the announcement to draw attention to financial regulation reform — legislation that Republicans largely opposed and voters largely ignored as they fret over a rough economy and near double-digit unemployment.
“Never again will folks be confused or misled by the pages of barely understandable fine print that you find in agreements for credit cards, mortgages, and student loans,” Obama was to say, according to excerpts of his remarks released in advance.
“Basically, the Consumer Financial Protection Bureau will be a watchdog for the American consumer, charged with enforcing the toughest financial protections in history.”
Obama has made improving the lives of the middle class a central theme of his efforts to support Democratic candidates and lawmakers ahead of the November elections, drawing contrasts with Republicans, who he says favor the rich when it comes to financial and tax policies.
Enacting the broad financial reform law — including the establishment of the consumer agency — is part of that strategy he hopes will resonate with Americans.
“If the CFPB can succeed at leveling the playing field, we can go a long way toward repairing a gaping hole in the budgets of millions of families,” Warren said in the blog.
“But nobody has ever thought or argued that the consumer bureau can fix everything. Lost jobs, stagnant incomes, rising costs for college, dwindling retirement savings — there’s a lot of work to be done.”
It is unclear how long Warren will stay in her job establishing the agency. Treasury, which is mandated to set it up, must lay out a timetable soon for how long that will take.
(Additional reporting by Caren Bohan and Ross Colvin; Editing by Bill Trott)