Elizabeth Warren Gets Duties Without the Official Title

Obama counts on Elizabeth Warren to set up the new consumer financial protection agency.

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While she wasn't named director, Elizabeth Warren nevertheless has major responsibility for getting the new Consumer Financial Protection Bureau, her brainchild, up and running by its statutory deadline of July 2011. That pleases her liberal and consumer-advocate supporters, who pushed the White House to give her the title, and leaves her critics stewing.

Avoiding a confirmation run-in with Congress, President Obama last week named Warren, a Harvard Law School professor who has had run-ins with the financial industry, as an assistant to the president and as a special adviser to Treasury Secretary Timothy Geithner. Obama made it clear that he was looking to Warren to ramp up the agency and then to help him pick a director, a job for which she remains a likely candidate. 

"I don't view this as substitute for a permanent director or an end run at all," says Travis Plunkett, legislative director for the Consumer Federation of America, an advocacy group. "The clock is ticking; this is a huge, new, close-to-$500-million-a-year agency that has to get up and running." 

He said the agency needs a permanent leader, "but given the way the Senate operates we are likely not to see one for another year." The director's job requires Senate confirmation. 

The agency is intended to provide more federal scrutiny and regulation of mortgages, credit cards, and other kinds of financial products to protect consumer interests. The recently signed Dodd-Frank financial reform law gives the Treasury temporary oversight of the bureau until an official director is named. 

Obama's move leaves the director job vacant, which means that Geithner will have the key statutory decision-making power for the time being. 

In her new role, Warren will set the agency's public policies, hire employees, establish legal departments, find office space and set up a complaint center for consumers, which advocacy groups say is an important and tangible first step in illustrating consumer protection. 

But since she isn't director, Warren might not have legal authority to write new regulations to police deceptive financial practices, says Pamela Banks, senior policy counsel for Consumers Union.

When Obama gave Warren her new role, he avoided what threatened to be a messy Senate confirmation process due to opposition from Republicans and the financial industry.

Obama has made clear that he has great respect for Warren, who first proposed the consumer protection agency, and that there was a pressing need for her leadership. "Elizabeth is the best person to stand this agency up," the president said in the Rose Garden on Friday. "Never again will folks be confused or misled by pages of barely understandable fine print that you find in agreements for credit cards or mortgages or student loans." 

But business groups have lined up against her. Opponents say that as chair of a congressionally authorized panel overseeing the government's Troubled Asset Relief Program, she's been too tough on Wall Street and banks. The U.S. Chamber of Commerce called Warren's new role and the lack of Senate confirmation "an affront to the pledge of transparency and consumer protection that's purported to be the focus of this new agency." 

Democratic Sen. Chris Dodd of Connecticut, one of the architects of financial reform, has expressed doubts that she could be confirmed as the agency's chief. Consumer Federation's Plunkett agrees, but says any candidate for the position will face trouble in the Senate: "Those who oppose the creation of the consumer bureau will oppose a vigorous director, period. It has very little to do with Elizabeth Warren."