Appointment Of Consumer Financial Products Czar Rankles Republicans

Register now

WASHINGTON – Republican lawmakers yesterday criticized President Obama’s appointment last week of consumer advocate Elizabeth Warren to an advisory role creating the new Consumer Financial Protection Bureau, bypassing Senate confirmation which would have been needed if Warren were nominated as director of the new agency.

Alabama Rep. Spencer Bachus, in line to become chairman of the House Financial Services Committee if the Republicans win control of the House, called the Warren appointment a “calculated political ploy” during remarks at NAFCU’s annual Congressional Caucus, asserting that the longtime consumer advocate would not pass muster with the Senate if formally nominated.

California Rep. Ed Royce said he was disappointed that Warren ascended as the lead person creating the new agency without proper vetting by the Senate.

Warren, a 61-year-old Harvard law professor, is widely credited with developing the idea for an independent agency to regulate financial products, but has drawn broad opposition from Republicans, who generally opposed the idea of the new agency.

So President Obama, seeking to avoid a nasty confirmation battle, appointed Warren special advisor to the Treasury, which is developing the new consumer agency that will be housed inside the Federal Reserve.

In subsequent remarks to the NAFCU conference, Warren said part of her job will be to create a set of rules not just for consumers, but for credit unions and other small lenders to compete against big banks. “We’ve got folks who want to play by a clean set of rules competing against folks who don’t,” she said.

“The job of regulation is not only to level the playing field between consumers and the lender, it’s often to level the playing field among the lenders so that everybody is competing on a straight-up basis,” said Warren.

Calling herself a “longtime member” of a credit union, Warren said she viewed the industry as an ally in the fight to protect consumers.

“I think that consumers and credit unions should be on the same side of the line,” Warren said.

“If at the end of the day we don’t have a robust – and this is very important – a diverse banking system that has different kinds of providers that come from a lot of different perspectives, offer different products, then we will have failed,” Warren said.

Warren’s remarks at the NAFCU conference followed a panel discussion with other financial lobby groups as part of an outreach effort on behalf of the new job.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER