WASHINGTON — There was little question about the extent of Sen. Elizabeth Warren's star power when she took office in January — it was just a matter of what she would do with it.
After 10 months on the job, the Massachusetts Democrat seems to have embraced a dual approach to her work, using her national following to bring attention to issues like "too big to fail" while also digging down into the weeds on illegal foreclosures, insurance licensing and other lower-profile topics, both on the Senate Banking Committee and off of it.
"Get me wound up on pensions alone, and we could talk for the rest of the afternoon," she quipped in a sit-down interview late last month with American Banker.
Indeed, Warren was less interested in discussing her high profile than she was explaining how her office can channel that energy to get more done.
"What I care about is trying to be effective. So this first year has been about learning as many tools in the toolbox as I possibly can," she said.
At the same time, it's tough to argue that her fame as a prominent scholar-advocate and founder of the Consumer Financial Protection Bureau doesn't lend her outsized influence — particularly on the banking panel.
"It obviously enhances her ability to make a difference in the Senate," said Sheila Bair, former chairman of the Federal Deposit Insurance Corp. and a Warren supporter. "She has a tremendous populist following, but she doesn't abuse it and she doesn't flaunt it. But it's there — it's a reality."
When she was elected last fall, many wondered if Warren would opt to follow in the path of well-known senators before her, most notably Hillary Clinton, who developed a reputation for putting her head down and focusing on constituent issues, or whether she would blaze her own trail on the back of her enormous populist support.
The reviews on that front have so far been mixed. While backers praised her efforts as measured and her ability to work across the aisle as Clintonesque, critics expressed frustration with her strong rhetoric, dismissing it as "showboating." One industry official likened her style more to Texas Republican Sen. Ted Cruz than to the former first lady and secretary of state.
Yet it seems like ultimately Warren has chosen a hybrid approach.
"She's taken on a combined role. Her work on Massachusetts issues, I think, has been very much in the Hillary Clinton model, and I think on nonfinancial services issues that impact average Massachusetts resident, she has gone out of the way to establish good relationships with Republicans and to work with them," said Brandon Barford, a vice president at ACG Analytics. "But she's just as much of a crusader on financial issues as expected."
Taking on GSE Reform
Most recently, the financial services crusader has delved into the nuances of mortgage finance reform, after staying quiet over the summer as debate ramped up in Washington. She told American Banker that while she praises the efforts of her colleagues, Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., saying their bill "ignited a conversation" on the issue, she still has questions about how exactly a new system should be designed. Despite her earlier reticence, it's clear the former academic hasn't been ignoring what to do with Fannie Mae and Freddie Mac.
"She is not the bomb-throwing, antibank caricature that many said she would be," said Dennis Kelleher, president and chief executive of the advocacy group Better Markets. "Her track record demonstrates that she has been strategic on the issues she has raised and has done it in a way that has not only been responsible, but has demonstrated her depth and breadth of understanding of the issues."
Many of Warren's concerns on housing finance struck a familiar tone with her larger body of work. She described the desire to ensure that a handful of megabanks don't come to dominate the secondary market, and stressed the importance of making loans available to low-income and rural families and providing additional affordable housing options to the needy.
"How a market that is privately driven is sure to give us 100% coverage in the guaranteed market is a real challenge," she said.
At the same time, she has also considered some of the more technical aspects of a housing finance overhaul. She said she is concerned with how an explicit government guarantee for the market would be triggered in times of crisis, an issue she recently raised at a Senate Banking Committee hearing as well. The Corker-Warner plan would require the private market to put up capital for the first 10% of losses, but leaves open the possibility of a structured transaction or bond guarantor model for determining when government steps in.
"Those are two very different guarantees — they obviously trigger at a different point, which means they would be priced differently and would have very different implications in the marketplace," she said. "And I don't think that's been spun out yet."