After the undermining of President Obama's recess appointment of Richard Cordray as the Consumer Financial Protection Bureau's director and talk swirling that Democrats may seek to cut a deal with Republicans, many of whom seek to scale back the agency, Sen. Elizabeth Warren may be the one who can save the CFPB.
As one of the Senate Banking Committee's newest members, Warren could prove to have a key role in assuring the CFPB's legal powers.
"She has the ability to play that role because she's essentially insulated from criticism on this," said Mark Calabria, a former top Republican Senate aide and now director of financial regulation studies at the Cato Institute.
Republicans are demanding three changes to the CFPB. First, they would like to replace the agency's single director with a five-member commission. Secondly, handing control of the agency's budget to congressional appropriators, and finally giving bank regulators more say in overriding its decisions.
"Warren is likely to agree to only one of those changes, observers said: replacing the director with a five-member commission. After all, her original vision for a consumer protection agency was even called the Financial Product Safety Commission and modeled after the Consumer Product Safety Commission, which is run by three board members," writes American Banker's Rob Blackwell and Victoria Finkle.
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